Ping® By Adlerlaw – Illinois Evidence Rules on Admissibility of Cell Phone Video

This month’s issue of Ping® highlights Illinois rules regarding use of iPhone-recorded video in a criminal trial. In case you missed it, my article, “Six Things You Can Do to Improve Your Contracts,” from ASID Impact Illinois Magazine, Issue Two, 2022, is discussed below.

Six Things You Can Do to Improve Your Contracts.

In case you missed it, my article “Six Things You Can Do to Improve Your Contracts” appeared in ASID Impact Illinois Magazine, Issue Two 2022, pages 22-24.

Here’s a quick summary.

If you have questions about your business, or about contracts, or if you need assistance navigating the process, please feel to contact me for more information. (866)734-2568 and David [at] adler-law.com

Illinois Rules About iPhone-Recorded Video in a Criminal Trial.

Cell Phone Video. We all have it. We all use it. But what if we need to rely on it in a Court of law to prove – or disprove – a version of the story that’s being told.

We all know how easy it is to fake video and there’s a whole category that’s so credible is hard to prove it’s fake. A free press should tell the truth. But as Pontius Pilate asked, “What is truth?” Who decides what is true? And who should compel the press to “tell the truth”? 

In his article, “Illinois Supreme Court Rules on Admissibility of Cell Phone Videos,” Criminal Law FLASHPOINTS, January 2023, author Matthew R. Leisten of the Ogle County State’s Attorney’s Office, discusses People v. Smith, 2022 IL 127946, an Illinois Supreme Court case upholding the state’s use of iPhone-recorded partial video clips from a building’s surveillance cameras in a burglary trial. Read more here.

Ping® by AdlerLaw – Important Reasons To Register Your Copyright

Copyright law protects the expression not the idea.

Many writers worry about “idea theft,” using it as the reason they don’t tell people about their projects, won’t publicaly post their loglines, or won’t apply for contests and fellowships. But the fact is, copyright law only protects the expression of an idea, not the idea itself. Lots of films and television shows have similar concepts.

But what do you do if you believe your actual script or deck, or other materials were stolen? I recently received a call from a prospective client with that very concern. Read more here.

Ping® by AdlerLaw July 2022 – Recent State Laws in Illinois & New York Affect Contractors, Interior Designers

This month’s issue of Ping® highlights recent changes in State laws in Illinois and New York. Effective January 1, 2023, Illinois joins at least 18 other states to have a Title Act authorizing Registered Interior Designers to seal any bound set or loose sheets of technical submissions. This change can only benefit everyone in the industry including, designers, tradespersons, and most importantly, consumers. Also noteworthy is New York’s legislative approval of NY State Senate Bill S8369B relating to protections for freelance workers. The Freelance Isn’t Free Act (the “Act”) if signed, would amend the New York Labor Law to establish rights for covered freelance workers such as the rights to receive a written contract, receive timely and full payment, and freedom from retaliation. 

Illinois: Legislation relating to Registration & the Scope of Practice of Interior Designers

Effective January 1, 2023, Illinois joins at least 18 other states to have a Title Act authorizing Registered Interior Designers to seal any bound set or loose sheets of technical submissions. This change can only benefit everyone in the industry, designers, tradespersons and most importantly, consumers as it will expedite some customary but often needlessly duplicated tasks.

The Title Act puts no stumbling blocks before those who wish be interior designers. These statutory provisions and rules do not regulate the practice of interior design – anyone can offer to provide and provide interior design services in Illinois. The Illinois act only regulates the use of a specific title – “Illinois Registered Interior Designer.”

Illinois is one of 19 states, including neighboring Minnesota, Wisconsin and Iowa, that have voluntary title registration for interior designers with no permitting authority. In addition, 21 other states, including Michigan, have no title laws or permitting authority for interior designers at all. Proponents of regulating interior design submit that interior designer registration requires industry recognized credentialing and rigorous testing.

If you have questions about the Act’s application to your business, or about the pros/cons of becoming a Registered Interior Designer, or if you need assistance navigating the credentialing process, please feel to contact me for more information. (866)734-2568 and David [at] adler-law.com.

New York: State Legislature Approves Statutory Protections For Independent Contractors

New York’s legislative approval of NY State Senate Bill S8369B relating to protections for freelance workers. The Freelance Isn’t Free Act, if signed, would amend the New York Labor Law to establish rights for covered freelance workers such as the rights to receive a written contract, receive timely and full payment, and freedom from retaliation. 

The Act establishes protections for certain freelance workers providing services for entities located in the City. The New York State Legislature had earlier this month approved a bill providing similar protections to freelance workers throughout the state. If signed by the Governor, the Act will take effect 180 days after signing and apply to contracts entered into with certain independent contractors on or after that effective date. The Act mirrors the City-specific text in almost all respects and amends the New York Labor Law to establish protections for covered freelance workers, including establishing rights for covered freelance workers such as the rights to receive a written contract, receive timely and full payment, and freedom from retaliation.

Independent Contractors

If you or your business is contracted to perform specific work for an “employer,” according to your own process, using your own resources, and outside the daily control of the employer, you are an independent contractor. Independent contractors are not considered employees. This creates risk and benefits for both parties. Considered self-employed, independent contractors do not receive most of the rights and benefits that employees receive from employers or by virtue of federal and state employment laws, particularly the Fair Labor Standards Act. In addition, independent contractors are responsible for paying all applicable federal, state and local taxes from the income you receive. However, civil rights law does apply to independent contractors in their relationship to employers. Independent contractors go by many names, including, freelancer, contractor, or consultant.

However, unlike an employee, the terms of the relationship between an independent contractor and the employer are subject to negotiation and may not always be presumed or mutually understood. For example, the terms of your work assignment, and who owns the finished (or in process) work product. For example, if you are a photographer working as an independent contractor, you retain the copyright to your photos even after delivering it to the employer, unless you have a written agreement explicitly stating the services are “work-made-for-hire,” specially commissioned, or otherwise assigned away. As an independent contractor, you will be paid according to the terms of your agreement, not according to the employer’s customary payroll. One of the biggest challenges for independent contractors is getting paid, but these risks can be addressed by properly considering  this issue prior to commencing work.

Focus | Vision | Perspective | Passion

Executives and creative professionals face an often confusing and dynamic set of challenges trying to ensure that their business remains legally compliant. Yet few can afford the highly-qualified and versatile legal staff needed to deal with today’s complex and inconstant legal and regulatory environment.

Adler Law Group is a boutique Entertainment, Intellectual Property & Media law firm created with a specific mission in mind: to provide businesses with a competitive advantage by enabling them to leverage their intangible assets and creative content in a way that drives innovation and increases the overall value of the business. Although we are a highly-specialized law firm, we counsel on a broad range of interconnected issues by leveraging synergies created where Intellectual Property Law, Contract Law and Corporate Law overlap.We approach our relationship with each client as a true partnership and we view our firm as an extension of their capabilities. Our primary value is our specialization on relevant and complex issues that maintain the leading edge for our clients. We invite you to learn more about the services we offer and how we differ.

Ping® June 2022 – FTC Updates Endorsement Guides 2022 Part I

The Federal Trade Commission (“FTC”) approved a request for public comment related to updating its Guides Concerning the Use of Endorsements and Testimonials in Advertising. These are better known as the “Endorsement Guides” or just the “Guides.” The current version of the Guides can be found at 16 CFR part 255. These updates were released in May 2022.

The proposed updates are fairly sweeping and touch many aspects of the Guides. I recently discussed these updates at AM Days as part of Affiliate Summit East in New York. Here are the highlights from responses to the questions I get most frequently.

Read the article HERE.

Ping® May 2022 – Improving Affiliate Engagement

Affiliate Marketers: Want to learn best practices, strategies, and tactics from a seasoned legal professional who works with businesses and regulators at the federal and state levels? 

David Adler takes clients through the ins-and-outs of providing advertisers, merchants, agencies and affiliates the tools they need for running a trustworthy and successful business.

On May 25, 2022 David Adler is presenting Trafficking in Trust: How to Enhance Affiliate Engagement an AMDays Workshop at Affiliate Summit East 22. In case you can’t make the presentation, here’s an excerpt of one of the topics covered:

The 3 C’s of Affiliate Marketing Disclosures: Clear Conspicuous Content. 

Clients often seek my counsel on issues related to Affiliate Marketing legal disclaimers and disclosures. For example, this might require guidance on the substance and placement of legal disclaimers for a consumer-oriented, product review and ratings website. This type of website needs to include at least two different, but related, disclosures. First, it must disclose that it is compensated when a user clicks on a link. Second, it must disclose certain material connections. 

Affiliate Disclosure Content

There are several factors to the affiliate commission disclosure. Appropriate disclosures have both the necessary content and the correct placement within a specified context.

What needs to be in your affiliate commission disclosure? 

The disclosure must make clear that you earn a commission if a user buys something after clicking on a link on your site.

Affiliate Disclosure Context

Where is the optimal location for the disclosure?

Although there is a general practice of putting disclosures on the bottom of the website pages, it can be somewhat obscured and less effective. A location at the bottom of the page, in the same font style, font color, size, and placement as the rest of the text on the bottom of the page, does not help it “stand out.”   

The key to proper affiliate link disclosures is making sure the disclosure is “clear and conspicuous.” This depends on both context (placement and proximity to the relevant content) as well as the content of the disclosure itself.  The general rule is that the closer the disclosure is placed next to the relevant message, the better.

Although not required, it is recommended to add the affiliate link disclosure on the home page, above the fold. While there is no explicit requirement, FTC disclosure cases and guidelines suggest that, in their view, this is required for adequate disclosures. 

What should I do now? Always seek experienced counsel. A seasoned lawyer will help you address other considerations including prominence, distractions, industry vertical (i.e. healthcare, financial services) requirements, and language. 

Ping® February 2022 – Just How Enforceable Are Online Terms?

Just How Enforceable Are Online Terms? What You Need To Know

We have all, at some point while online, clicked on the “I Accept” button without giving it a second thought. Whether creating a social media account, signing up a for an online service, or just trying to get to bank statements, more and more businesses are linking to their standard terms and conditions online for suppliers and customers. But just how enforceable are these? Does it matter where the link is displayed or how it is displayed. Some courts have refuse to enforce online disclosures due to perceived problems with website layout.

Almost every commercial website provides some amount of information and resources. More often than not, today’s websites offer robust features and content such as article commenting/discussion groups and “pay-wall” access to restricted content and features. In addition, many websites offer content, feeds and articles that are licensed from third parties the use of which may be restricted to in-browser page viewing or caching, with further commercial use restricted. For most businesses, since customers will search and purchase through a website (or mobile application), the principal ecommerce risk is the legal relationship between website users and the web site operator. Whether users only browse information or continue to complete a purchase transaction, a contractual relationship can be formed addressing both parties rights, obligations and remedies.

Two Types of Online Contracts

With respect to contract law in relation to the offer and sale of goods or services, online (ecommerce) contracts generally take one of two forms: (1) Click-through or “Click-wrap” agreements, and (2) User Agreements, often referred to as Terms of Use, Terms of Service, or “Browse-wrap” Agreements. As a general proposition, formation of contracts (offer and acceptance) and enforceability of contractual provisions (choice of governing law) are matters determined by reference to state law. However, in the United States, federal courts are often required to determine matters of state law and most states have relatively uniform requirements with respect to the three principal concepts in the determination of contract enforceability: offer, acceptance and consideration.

Click-wrap Agreements

The first type of contract, the so-called “Click-wrap” agreement, is usually the agreement formed when a website user purchases goods or services through an ecommerce shopping cart application (e.g. purchasing airline tickets). In the context of online contracts, a user is presented with the online terms and conditions and must “click-through” as part of the transaction.

“Click-wrap” agreements derive their name from the shrink-wrap agreements that were first incorporated into commercially-distributed software. Users were deemed to have accepted the terms of the agreement by opening the package and installing the software. In ProCD, Inc. v. Zeidenberg, the court held that a user was bound by the terms and conditions of a software license agreement (contract) included in a users’ manual within the packaging, and which was displayed on a computer screen upon installation and use of the software. Such contracts are enforceable unless their terms are objectionable on grounds applicable to contracts in general (for example, if they violate a rule of positive law, or if they are unconscionable).

Browse-wrap Agreements

The second type of contract, commonly-known as “browse-wrap” agreements, apply to contractual agreements between the website user and the website operator that arise even though the user may not engage in pro-active contract acknowledgement. Browse-wrap agreements are generally comprised of terms and conditions posted on a website, typically accessible via a hyperlink appearing on various pages on the website, or at the bottom of the website pages, with no requirement that a website user take any affirmative action to indicate assent to the terms and conditions. 

The existence and enforceability of browse-wrap agreements is crucial to operation of a website because as a user may search information, information related to the other programs or other information available on the website, without actually consummating a purchase transaction. Since a business likely wishes to protect its proprietary information and other content available to users of the website, it is important review the availability and enforceability of browse-wrap contracts.

Two Cases Two Different Outcomes

Maine State Court held in Sarchi v. Uber Technologies (2022 ME 8 – Maine Judicial Branch) that online contracts are enforceable only if the consumer (1) has reasonable notice of the online contract terms, and (2) has manifested consent to those terms. Following First Circuit’s formulation in Cullinane v. Uber Technologies (No. 16-2023 (1st Cir. 2018)), the Court held the contract unenforceable because 1) the consumer was not provided reasonable notice of the terms, 2) the hyperlink to the contract terms was not readily identified as a link through the use of underlining, blue text, or appearance as a button; 3) the hyperlink was inconspicuous given the use of small font; and 4) the hyperlink was unlikely to draw attention because the screen focused on payment information rather than the hyperlink.

Additionally the Court concluded the consumer did not assent to the terms by clicking the “Done” button on the payment screen because the significance of clicking that button to indicate the user’s consent to the terms of agreement was not explained.

Ping® January 2022 – Reminder To Review Your Contracts

Review Your Contracts Every Year.

One of the most important tools to protect your business – your ideas (copyrights, trademarks, trade secrets, confidential and proprietary information), customer relationships and talent pool – is your written contract. Your contract is the foundation for a reliable relationship for you, your customers and your employees. More importantly, it helps to prevent misunderstandings and false expectations that can lead to a breakdown in your customer relationship, jeopardize projects, or even worse, result in litigation.    

Starting with a form is just OK.

Many companies start with a model or “form” contract adapted from forms available online or drafted when the business first started.  Oftentimes, I am presented with form contracts “downloaded from the Internet” or provided by a form-filling service that will do cheap and quick corporations or LLCs, without actually providing any legal services. Although these forms may be a good starting point, your business needs, it deserves, contracts tailored to the specific needs of the enterprise or relationships.

Franken-contracts can ruin your business.

As businesses develop over time, you may have revised your contracts, adding a little here, removing a little there. Maybe you read an article about an important case in your industry and decided to add some text from the contract discussed in the court’s legal opinion. In many cases, over time, the agreements become “Franken-contracts” an odd amalgamation of trade lingo, inconsistent terms and even contradictory conditions. At best these are ambiguous and confusing to read. At worst, they become unenforceable.

Review contract annually to avoid weak spots.

At some point, you should review, revise and generally “tighten” existing contracts. You should have your lawyer review them to make sure that there are no mistakes, ambiguities or omissions that could cost you or your customers. I urge clients to have their contract forms reviewed on an annual basis. Depending on changes in the law, changes in the industry or changes in your own business, this process should only take a few hours.

Contact us for a free, no-obligation consultation.

To learn more about how we can help your with your business and contracts, contact the Lawyers at the Adler Law Group at David @ adler – law . com (without spaces) or (866) 734-2568. Learn more abut us here:

http://www.adler-law.com

Ping® December 2021 – Data Protection & Copyright Law 

Globally, non-profits, NGOs, and environmental advocacy organizations are expanding scientific data collection while combining this data with data from third parties. Data scientists increasingly find themselves applying creative thought the the selection of tools and instruments, calibration of those instruments, and the process and selection of data to measure. This combined data is then used for synthesis, modeling and reporting, with the goal of making some or all of it available to the public. As Data scientists look to make these resources public, there are concerns with protecting the integrity, availability, and accessibility, of these resources. Since availability and accessibility and driven by funding, there is a need to commercialize these assets.

I recently had the honor of discussing the question of what legal rights exist in data at the Environmental Defense Fund‘s monthly Lunch & Learn.

In legal terms, those rights are intellectual property (IP) rights such as copyright, patents, and trademarks, confidentiality obligations, and contract rights. Each IP right has its own rules, and applying those rules to data leads to a complex, multi-layered analysis where the law can be unsettled and uncertain.

The principal areas of law discussed were copyright and contracts. The other forms of IP rights such as Patent, and Trademark did not apply to this discussion on data insofar as the term refers to information only, as opposed to a method or process applied to that data (Patent). A trademark is a source identifier that distinguishes one company, product or service from another and  which is used to prevent confusion in the marketplace.

If you would like a copy of the Presentation in .PDF format, please Subscribe to Ping® -Arts, Entertainment, Media,  Communications, & Technology  Legal News From Adler Law Group.

Ping® October 2021 Changes Coming to Non-Compete Agreements in Illinois

EMPLOYMENT (820 ILCS 90/) Illinois Freedom to Work Act.

Illinois passed a law that amends the Illinois Freedom to Work Act. Expands the scope of the Act to apply to all employees (rather than only low-wage employees). Prohibits all covenants not to compete.

Scope

The law goes into effect January 1, 2022 and amends the Freedom to Work Act (the Act), which restricts the use of non-compete agreements for low wage workers. For the first time, Illinois will have statutory requirements for mandatory review periods, definitions of adequate consideration and legitimate business interests, as well as specific salary minimums for employees subject to restrictive covenants. 

Application

The law will apply to non-compete and non-solicit covenants. The law does not apply to contracts covering confidential and proprietary information, protection of trade secrets, or inventions assignment agreements. The law also does not address covenants for independent contractors, and expressly carves out restrictions on a person purchasing or selling the goodwill  or an ownership interest in a business.

Mandatory Review

The law requires that an employer advise the employee in writing to consult with an attorney prior to entering into the covenant and provide the employee with at least 14 calendar days to review the agreement. 

Consideration

Contract lawyers know that to be enforceable a promise must be supported by consideration. Due to the unique nature of restrictive covenants, there is heightened scrutiny of what will constitute sufficient consideration for a restrictive covenant under the Illinois law. The leading Illinois case, 

Fifield v. Premier Dealer Services, Inc., 993 NE 2d 938 (Ill.App.1st 2013), an Illinois court decided that mere employment or continued employment for at-will employees, is not adequate consideration to support a restrictive covenant unless the employee remains employed with the employer for at least two years after signing the agreement. 

Illinois law will now expressly defines “adequate consideration” as either (1) the employee working for the employer for at least two years after signing the non-compete or non-solicitation covenant or (2) other sufficient consideration, such as “a period of employment plus additional professional or financial benefits or merely professional or financial benefits adequate by themselves.”

The law leaves open the definition of “additional professional or financial benefits.” Courts have found signing bonuses, equity grants, and other types of consideration sufficient under current case law. 

Going Forward

While there is time to plan for the effect of the new law, it’s not too soon to begin reviewing current existing “form” contracts and consider changes. One-size-fits-all contracts always need fine-tuning. Change sin the business operating environment require a closer look at non-compete and non-solicitation covenants. 

Ping® – Arts, Entertainment, Media and Advertising Law News – Protecting Furniture Design Keeps Getting Harder

Herman Miller, Inc. – a leading furniture brand and purveyor of the iconic Eames Chair Design – suffered a loss at US Trademark Trial and Appeal Board (TTAB) in its bid to protect as “trade dress” the design of the chair. The case involves a well-known chair design dating from the 1940’s, by designers Ray and Charles Eames. The chair ultimately was recognized by Time Magazine as the Best Design of the 20th Century, and now is in the design collections of numerous museums. Herman Miller sought registration of most of the chair’s configuration as a mark, depicted in more than one view, for “furniture, namely, chairs.”

The court weighed each of the Morton-Norwich factors, concluding that the proposed three-dimensional product configuration as a whole indicates that it is functional. The court found that patent evidence, the advertisements touting utilitarian advantages of the design, and the limited availability of alternative designs that would work equally well, proved functionality.

Key Take Aways:

  1. Beware of patent evidence in trade dress protection due to risk that distinctive design elements be treated as de jure functional. In general, examining attorneys no longer make this distinction in Office actions that refuse registration based on functionality. De facto functionality is not a ground for refusal. In re Ennco Display Sys. Inc., 56 USPQ2d 1279, 1282 (TTAB 2000); In re Parkway Mach. Corp., 52 USPQ2d 1628, 1631 n.4 (TTAB 1999).
  2. Ensure that advertising promotes the nonfunctional design elements, such “look for” advertising. Examples include evidence, including SEO data, that connected the applicant’s efforts to promote the applied-for mark as a trademark and consumers’ ability to conceive of the applied-for mark as such, and examples of unsolicited media coverage

Social Media Advertising Tools And User Consent: What Are The Requirements?

Perhaps you’ve seen them, those television and radio ads that talk about the “creepy” nature of some adverting on the Internet that follows consumers across their social media. According to Pew Research, most Americans believe their online activities are being tracked and monitored. 

The fact is, most companies can and do share data with social media platforms to ensure targeted advertising reaches receptive audiences. As more tools become available and the variety of data sources grows globally, platforms and advertisers are re-examining their rights and obligations when it comes to something as simple as matching customers’ email addresses with their Facebook accounts. 

Facebook’s Customer List Custom Audiences (“Custom Audiences”) tool is one such tool that has the potential to expand an advertiser’s liability for unauthorized use of customer data. For EU customers, a German Data Protection Authority ruling requires a individual’s explicit consent to such sharing.

The Facebook Custom Audiences tool enables advertisers to create targeted advertisements to Facebook users by combining Facebook data with the advertiser’s data such as email addresses and phone numbers. To use marketing tool the advertiser must comply with the consent and privacy expectations of individuals who have provided email addresses.

Consent to Use Email Addresses

While the use and disclosure of email addresses is regulated in some countries, the U.S. does not have a uniform data privacy protection scheme. U.S. privacy rights are protected through a patchwork of laws addressed to specific types of harm, such as unauthorized access and disclosure of financial (Fair Credit Reporting Act (FCRA), 15 U.S.C. § 1681) or healthcare-related (Health Insurance Portability and Accountability Act of 1996 (HIPAA) 42 U.S.C. § 1320d–2) data. While the CAN SPAM Act (15. U.S.C. § 7701 et seq.) specifically regulates email, the Act excludes communications based on a previously existing relationship. 

Importantly, for most purposes, permission of the e-mail recipient is not required. However, messages MUST contain a mechanism to request to opt-out of future email messages. If email addresses are acquired from third-party sources, such as marketing databases or social media, ensure users are given reasonable notice and choice about the use of such data.

The Federal Trade Commission endorses a market-style model of ensuring the fair use of information that allows individuals to participate in decisions on the disclosure and use of their personal information. As articulated by the FTC, the elements of this approach are notice, choice, access, security and enforcement.

Contractual Requirements of Facebook Custom Audiences 

In order to use the Custom Audiences tool, the advertiser must agree to additional terms and conditions. Facebook’s Custom Audiences terms require that the advertiser have both “all necessary rights and permissions” as well as a lawful basis to disclose and use the email addresses “in compliance with all applicable laws, regulations, and industry guidelines.” 

Recommendations

Review your Privacy Policy, Website Terms & Conditions, and membership/subscription applications to confirm the existence of a clear mechanism to opt-out of future email messages. If email addresses are acquired from third-party sources, such as marketing databases or social media, review data gathering practices, review scope of permissions granted to the sources of data and ensure users are given reasonable notice and choice about the use of such data.

What Is Cyberlaw?

On November 13, I had the honor of providing a lecture on Cyberlaw to students at the Boston College Law School. Virtually, of course. I had been asked to talk about trends in Cyberlaw with a specific focus on issues related to intellectual property.

So what is Cyberlaw? Simply put, it is the “Rules of the Road” for the “information superhighway.” Cyber law is the law that governs rights, obligations and remedies of people and transactions conducted over global computer networks.

In a year that has seen hyperbolic growth in technology, commerce, and communications, this topic couldn’t be more timely. In order to frame the discussion, the scope featured a discussion of the Three Cs of Cyberlaw: Connections, Content and Commerce.

The first part of the discussion centered around Content, or issues related to Copyright, such as Free Speech/First Amendment CDA Sec. 230, Creative Works, Media and Entertainment, UGC and the DMCA.

The Second part of the discussion centered around Commerce or issues related to Trademarks, marketing and branding, such as: Marketing/Advertising, Domain NamesCyberpiracy prevention, Keyword Advertising and Social Advertising.

The third and final part of the discussion focused on Connections and Communications and issues related to Personal Data, Stalking, Harassment, Surveillance and Sovereignty, issues around Social Media Freedom of Speech v. Freedom of Reach, and the latest developments around Political speech online.

The lecture closed with a Q&A focused primarily on Navigating Law School and Professional Practice.

COVID-19 is changing consumer behavior in important and probably permanent ways.

COVID-19 is changing consumer behavior in important and probably permanent ways. This is why marketers should take notice.

Sparked by the coronavirus pandemic, consumer and business e-commerce transactions accelerated the ongoing shift toward online commerce. This enables even more marketing opportunities that create real time connections with customers. From pink ribbons to Product Red, social feeds are full of calls to support those in need. In this way, online cause marketing can drive “consumption philanthropy” replacing mindless buying with virtuous action. Tying cause-worthy buying with the latest ecommerce boom creates new opportunities for marketers.

However, before turning your blog, social media accounts, or website into a funnel to raise money for First Responders, it is important to understand that all states have laws that govern charitable solicitations. Running promotions and undertaking solicitations for charities means that unless the business itself is set up as a tax exempt charitable entity, these activities are considered “Commercial co-ventures.” Generally this is a person (or business) who, for profit, is primarily engaged in commerce other than in connection with soliciting for charities and who conducts a charitable sales promotion.

In Illinois, Sec.3. (b) of the Solicitation for Charity Act provides the following persons shall not be required to register with the Attorney General: 3. “Persons requesting any contributions for the … benefit of any individual, specified by name at the time of the solicitation, if the contributions collected are turned over to the named beneficiary, first deducting reasonable expenses for costs of banquets, or social gatherings, if any, provided all fund raising functions are carried on by persons who are unpaid, directly or indirectly, for such services.” Emphasis mine.

Even if you are not raising money for a good cause, consider using disclaimer s to let your audience know product and company names are trademarks of the respective owners and does not imply any affiliation with or endorsement by them.

Ping® by AdlerLaw – Structuring Interior Design Purchasing Fees

I originally intended to call this article Challenges For Structuring Interior Design Purchasing Fees and Mark-ups, but felt that might be too alarmist.

Nevertheless, Interior Designers often find it challenging to craft the best structure and find the right way to charge clients for interior design services, as well as related services like purchasing and project management. Whether you plan to start up an interior design business or you are already a seasoned interior designer, having clear terms on charges for art, furniture, finishings, fixtures, and other decorative items (sometimes generally referred to as “FF&E” for convenience), will avoid problems in the future. I find a lot of designers tend to skew toward vague and general terms about how marks-ups are calculated and charged.

Another wrinkle arises if the Designer obtains items exclusively through trade-only sources, since there is no “retail” equivalent. The Designer has developed relationships with vendors and service providers enabling Designer to receive pricing and availability not accessible to the public at large. 

Interior Design contracts cases rarely make headlines. That’s why a recent case in Virginia is worth noting.  In the U.S. District Court for the Eastern Dist. of Virginia case of Tanya M. Johnson v. Robert Shields Interiors, Inc., the contract for interior design and decorating services, including purchasing furniture, authorized a ten percent (10%) markup on shipping and related services but did not provide for any other markups, commissions, or fees. Johnson v. Robert Shields Interiors, Inc., Civ. No. 1:15cv820, 20 (E.D. Va. May. 11, 2016)

At trial, plaintiff proved that the designer never provided any receipts, vendor invoices, or purchase orders, to show commissions or rebates received from the vendors, and the designer further refused to provide proof of the furniture charges and shipping costs when asked. Discovery revealed that the designer was secretly marking up most of the furniture sourced for the client by anywhere from 35 to 100 percent. Although the Court entered a default judgment for the plaintiff for the defendant’s failure to appear at trial to defend himself, the court did analyze the breach of contract claim and did state that the designer’s “undisclosed markups on items procured for plaintiff are a breach of the Agreement.”

Also worth noting is the Court’s analysis of the claim for violation of the Virginia Consumer Protection Act (VCPA). The Court stated that the failure to disclose “rebate and commission arrangements with its vendors” and “charg[ing] … undisclosed markups for many of the furniture items procured,” such as “$4,800.00 for a lounge that only cost $2,481.00, and $11,000.00 for a table that only cost $5,999.40” satisfied the VCPA’s prohibition against using deception, fraud, false pretense, false promise, or misrepresentation in connection with a consumer transaction.” 

Link https://casetext.com/case/johnson-v-robert-shields-interiors-inc

Given my experience working with interior designers, the designer in the Johnson case no doubt believed that because the contract was silent on the amount of the mark-up that he could charge, he had discretion to charge whatever mark-up he chose.

To avoid these headaches, it is important to be clear about how purchasing fees are structured. This can be done several ways. First, if you intend to charge for your time spent during the purchasing process, then include that in your contract. For example “Designer shall charge it standard hourly rate for all time spent on the procurement of furniture and decorative items.” 

Second, if you intend to charge a flat fee for the purchasing process, then be clear about whether that fee includes your fees. For example, the following clause comes from another case [Marcus v. Marlene Dennis Design, LLC] https://www.virginiabusinesslitigationlawyer.com/wp-content/uploads/sites/52/2022/07/Marcus-Complaint.pdf that also made headlines.

Here is the clause at issue:

“Furnishings, rugs, artwork, decorative lighting and accessories not to exceed $250,000. Designer and client to review Furniture Plan and agree on the items to be re-purposed and to confirm that $250,000 is an appropriate amount given the items required.”

This clause is simply too vague. For example, it is unclear what is included in the $250,000 sum.

Key Take Away:

Contract language that governs fees on purchasing services, commissions on the goods, and/or third-party services, must be clear and unambiguous as to how the fee is calculated, what purchases are subject to the fee, whether discounts are available, and how they’re applied, if at all.

For answers to these and other mission-critical business issues faced by designers, please contact us today for a no-fee, limited, no-obligation consultation. (866) 734-2568. http://www.adler-law.com

Ping® by AdlerLaw A Note On Protecting Descriptive Words

When a party seeks to protect a mark that is unregistered, the plaintiff has the burden to establish its entitlement to protection under the Lanham Act due to the “distinctiveness” of the mark. Platinum Home Mortg. Corp. v. Platinum Fin. Grp., Inc., 149 F.3d 722, 727 (7th Cir. 1998).

“The first step in determining whether an unregistered mark or name is entitled to the protection of the trademark laws is to categorize the name according to the nature of the term itself.” Int’l Kennel Club of Chi., Inc. v. Mighty Star, Inc., 846 F.2d 1079, 1085 (7th Cir. 1988). “Marks are often classified in categories of generally increasing distinctiveness . . . they may be (1) generic; (2) descriptive; (3) suggestive; (4) arbitrary; or (5) fanciful.” Two Pesos, Inc. v. Taco Cabana, Inc., 505 U.S. 763, 768 (1992); see also Packman v. Chi. Tribune Co., 267 F.3d 628, 641 (7th Cir. 2001).

A generic term is “one that is commonly used and does not identify any particular source and therefore, is not entitled to any trademark protection.” Platinum Home Mortg., 149 F.3d at 727. A descriptive mark “describes the ingredients, qualities, or characteristics of an article of trade or a service” and may be protectable. Id. (internal quotation marks omitted). A suggestive mark “stands for an idea which requires some operation of the imagination to connect it with the goods.” Id. (internal quotation marks omitted).

While a term that is suggestive is automatically entitled to trademark protection, if a term is merely descriptive, the plaintiff must show that it has acquired “secondary meaning in the collective consciousness of the relevant community.” Id. Courts consider several factors when deciding whether secondary meaning has been established: “(1) the amount and manner of advertising; (2) the sales volume; (3) the length and manner of use; (4) consumer testimony; and (5) consumer surveys.” Id. (internal quotation marks omitted).

Sometimes this issue arises in the context of competing restaurants. Courts will focus on the ‘salient portion’ of the marks. Sullivan vCBS Corp., 385 F.3d 772, 777 (7th Cir. 2004)) The Court compares the parties’ marks in the context of what happens in the marketplace, not necessarily by looking at the two marks side by side. TyIncvJones Grp., Inc., 237 F.3d 891, 898 (7th Cir. 2001). Where “the public will encounter the marks in written as well as spoken form . . . it is essential to consider the marks’ visual characteristics” as well. Barbecue MarxIncv551 OgdenInc., 235 F.3d 1041, 1044 (7th Cir. 2000). 

If you do choose a descriptive name for your restaurant, the name may not be subject to attack based on dictionary definitions linking that term to eating, drinking or entertainment establishments, and on news articles with uses of either in relation to such establishments.

If the term is found to be “highly descriptive,” you will need to prove that the term has acquired “secondary meaning. This can be done by:

  • Showing the term has a double meaning in the minds of your customers 
  • Showing your sales and advertising 
  • Showing how third parties refer to your mark on social media, in articles, or in communications.