In May 2006, Cingular Wireless issued a press release containing information about Cingular’s preparedness for disasters, such as hurricanes, through its “MACH1” and “MACH2” mobile command centers.  Playing off the “MACH” name, the press release compares the significance of Cingular’s mobile command centers with the achievement of legendary test pilot Chuck Yeager in breaking the sound barrier and achieving Mach 1.

General Yeager sued bringing claims for, among other things, violation of California common law and statutory right of publicity.  Cingular, now AT&T, brought a motion for summary disposition on the grounds that (1) the First Amendment protects the press release because it contains newsworthy matter and is not commercial speech, and (2) the use of Yeager’s name was “fleeting and inconsequential”.

After all, AT&T argued, the press release did not include a picture of Yeager, did not mention his name in any headline or headings, did not offer for sale any specific products or services, and certainly did not state that Yeager endorses the company or any of its products or services.  The connection between the new mobile service and Yeager’s feat may be tenuous (and, okay, stupid) but Yeager’s accomplishment is, after all, an historical fact.  Is this really something Yeager should be able to control, even in a quasi-commercial context, where there isn’t a clear message of endorsement?

The district judge apparently thought so, and earlier this month denied AT&T’s motion.  Although press releases serve both commercial and news reporting functions, the judge determined that the press release, in this case, was primarily commercial in nature.  The judge held that “Yeager’s name and accomplishments were used to attract attention to [AT&T]’s unrelated wireless services,” and that his “name and accomplishments in breaking the sound barrier are wholly unrelated to [AT&T]’s mobile command centers and cellular service in emergency situations.”  The court further noted that the use of Yeager’s name and accomplishment may have been a small part of the press release but was, nevertheless, used to uniquely enhance the marketability of AT&T’s service.

The scope of protection for a celebrity’s name, likeness, and, in this case, accomplishments continues to expand.  In an abundance of caution, those in the PR industry should avoid even fleeting references to celebrities in press releases, or get permission for the use.

–Matt

The online magazine Concentrate has a roundup of the major venture capital deals and acquisitions in the Ann Arbor area in 2009.  The article can be found here.

–Matt

Last year, early-stage venture firm Y Combinator “open sourced” the legal documents they provide to their startups to use with investors after Y Combinator’s seed funding.  The documents can be found here.  TechStars followed by releasing the legal documents they use as a starting point for seed-stage financing for their companies.  Those documents can be found here.  In both cases, the goal is to help young startups avoid at least some of the legal costs associated with first-round financing by simplifying, and hopefully standardizing, the negotiating process.

A client now points me to this TechCrunch article on The Funded’s release of its Ideal First Round Term Sheet for venture rounds (available here).  Like Y Combinator and TechStart, the goal is to reduce legal fees (which average $50,000 or more for a venture round) but also to protect founders by providing them with standard, founder-friendly deal terms for venture rounds.

–Matt

The Great Lakes IT Report is announcing that four Michigan startups have received a combined $924,000 from the Michigan Pre-Seed Capital Fund.  Here are the specifics on the companies as reported by GLITR (links are mine):

* Mandy & Pandy teaches kids Chinese in a fun and easy way through books, CDs, DVDs, toys, fashion, and television.  Similarly, Mandy & Pandy teaches English to Chinese-speaking children.

* Algal Scientific’s proprietary technology provides advanced nutrient removal for municipal and industrial wastewater allowing customers to meet stringent EPA standards, while producing algal biomass that can be used for biofuels and fertilizer production.

* Axenic Dental has created a disposable high-speed dental drill that can be used for any procedures in the dental market where re-usable metal handpieces are currently used.

* RealBio Technology will commercialize a 3D cell culture tool within the life science industry that will transform stem cell research. The Nth Degree System is a high-value, high-margin, single use tool that will have broad acceptance initially in stem cell ‘farming’ and research.

Read the whole article here.

–Matt