The Federal Trade Commission (FTC), according to its website, is “the nation’s consumer protection agency” and “works for the consumer to prevent fraud, deception, and unfair business practices in the marketplace.” To that end, the FTC publishes a number of resource guides to help businesses comply with federal law and FTC regulations. One such guide is the Guide Concerning the Use of Endorsements and Testimonials which attempts to draw a line between “endorsements” (which must always reflect the honest opinion of the endorser) and pure “advertisements” or other non-endorsements (which do not have to comply with endorsement guidelines). The Endorsement Guide provides examples of what does and does not constitute “endorsements” by consumers, experts, and organizations, and addresses when and how to disclose any material connection between the endorser and the marketer of the product.
The FTC has now updated the Endorsement Guide, which was last updated in 1980, to extend it to viral marketers, bloggers, and personalities on social-media sites like Facebook and Twitter. The new rules essentially hold these “new media” outlets to the same standards, and the same liability for false statements, as traditional media outlets. The new Guide covers such things as paid blog reviews, blog reviews where a product has been provided to the blogger for free (the receipt of which would have to be disclosed), advertisers interacting on message boards (who would have to disclose their relationship to the product manufacturer), and so-called “street teams” (who would also have to disclose their relationship to the advertising agency).
The Consumer Collective blog has a nice rundown of the new rules and how to comply.
CBS Interactive operates the website CBSSports.com. The NFL Player’s Association acts as the exclusive collective bargaining representative for active players in the NFL. Among other things, the NFLPA has the right to license the use of the individual players’ names, signatures, facsimile, voices, pictures, photographs, likenesses, and biographical information in connection with “group licensing programs” involving six or more players (e.g., fantasy sports, video games, etc.). NFLPA assigned this right to Players, Inc. in exchange for royalties. Players, Inc. in turn licenses this right to companies like CBS to use in programs such as fantasy sports. In fact, for several years CBS did just that, running both free and “pay for play” versions of its fantasy league under a license agreement with Player, Inc.
However, in 2008, CBS refused to renew its license after the Eighth Circuit in C.B.C Distribution and Marketing Inc v. Major Leage Baseball Advanced Media determined that use of baseball players’ names and statistics did not violate any right of publicity, but that even if it did, persons enjoyed a First Amendment right to use the players’ names and statistics that prevailed over any right of publicity. When Players, Inc. threatened to sue, CBS brought an action for declaratory judgment that its use of player information was permissible under the CBC case. The Minnesota District Court in the CBS case agreed.
The NFLPA and Players, Inc. attempted to distinguish CBS’s use of player information from the use in CBC caseby claiming that they were used in such a way that users of the CBS fantasy football site might believe that the players endorsed the CBS site. The Court rejected that theory because “the manner in which the player information is presented is akin to newspapers and magazines, which routinely display pictures and information about celebrities, including professional athletes.” The Court also rejected the idea that the CBC case result stemmed from the unique place baseball holds as a “national pastime” since football arguably has a larger audience than even baseball. The Court, therefore, found the CBC case controlling and granted CBS summary judgment.
On Saturday, June 13, at 12:01 a.m. (EDT), Facebook, the venerable social networking site, started allowing users to create personalized usernames, otherwise known as “vanity URLs”. Facebook has been announcing this feature for the last week or so, stating that it will make it easier for people to find users on the site. Before, the URL for a user might read “www.facebook.com/id=23427602734″ but now can be personalized to read “www.facebook.com/mwbower.” Twitter and YouTube have been offering this feature for some time.
As has been the case over at Twitter and YouTube, vanity URLs can cause problems for trademark owners when users “personalize” their URLs with famous brands (e.g., “facebook.com/[brand name here]“). Some have suggested that this use of a trademark may not be actionable under federal law, since the use is not “in commerce” as required under the Lanham Act.
Facebook has, however, created some safeguards for trademark owners. Prior to June 13, trademark owners could have enrolled their trademarks with Facebook to block users from submitting those trademarks as a personalized URL. Now that username registration is open, trademark owners may still protect their rights by using Facebook’s existing infringement reporting process. Facebook also reserves the right to reclaim any vanity URL for any reason.
If you are a trademark owner and missed your opportunity to block use of your brand as a URL, it may not be too late to register the URL yourself (new users may do so starting on Sunday, June 28). Otherwise, you can still play defense by using Facebook’s IP infringement claims process here.
The Federal Trade Commission (FTC), according to its website, is “the nation’s consumer protection agency” and “works for the consumer to prevent fraud, deception, and unfair business practices in the marketplace.” To that end, the FTC publishes a number of resource guides to help businesses comply with federal law and FTC regulations. One such guide is the Guide Concerning the Use of Endorsements and Testimonials which attempts to draw a line between “endorsements” (which must always reflect the honest opinion of the endorser) and pure “advertisements” or other non-endorsements (which do not have to comply with endorsement guidelines). The Endorsement Guide provides examples of what does and does not constitute “endorsements” by consumers, experts, and organizations, and addresses when and how to disclose any material connection between the endorser and the marketer of the product.
For example, a television ad for Nike golf clubs showing Tiger Woods using the clubs would be an “endorsement” by Tiger, even though he makes no verbal statement in the advertisement. In order for this to be an honest endorsement, Tiger must be an actual user of the irons at the time the commercial airs. However, even though Nike’s compensation to Tiger is substantial, neither the fact that Tiger is paid nor the amount that he’s paid need be revealed – since this is already assumed by consumers who can judge for themselves the credibility of the endorsement without the need for disclosures.
Recently, the FTC has sought to update the Endorsement Guide, which was last updated in 1980, and extend it to viral marketers, bloggers, and personalities on social-media sites like Facebook and Twitter. The new rules would essentially hold these “new media” outlets to the same standards, and the same liability for false statements, as traditional media outlets. The new Guide would cover such things as paid blog reviews, blog reviews where a product has been provided to the blogger for free (the receipt of which would have to be disclosed), advertisers interacting on message boards (who would have to disclose their relationship to the product manufacturer), and so-called “street teams” (who would also have to disclose their relationship to the advertising agency).
“A 12-person jury deliberated six hours over two days in January before awarding [the plaintiff] $50,000 in compensatory damages. The verdict made him the first plaintiff awarded damages in a libel suit against a blogger….The case is one of at least 50 similar suits filed in the past several years.” — Kansas City Daily News, October 26, 2006
“Social media – always fun until someone gets sued.” — FP Legal Post, March 16, 2009
What are blogs, wikis, and online forums?
Blogs, wikis, and online forums are part of the Web 2.0 social media explosion that are changing the way we do business and work with each other. Web 2.0 represents one of the greatest opportunities of our lifetime to share ideas and work collaboratively.
However, Web 2.0 also represents one of the newest legal threats to people and companies utilizing these tools. Whether you are new to Web 2.0 or a relative old-timer, you have probably witnessed more and more stories every day about people and companies getting in trouble for what they or their users have posted online.
What legal liability issues can arise from my blog, wiki, or online forum?
Generally, you face the same liability issues as anyone making a publication available to the public. The main legal liability issues include:
Defamation
Intellectual Property (Copyright/Trademark)
Trade Secret
Right of Publicity
Invasion of Privacy
Whenever you open the Web 2.0 door, inevitably someone will publish information or post content that others don’t want published. Someone might, for example, publish something that someone considers defamatory or private, republish someone’s copyrighted content without permission, or misuse or tarnish someone’s trademark in a way that confuses consumers.
What can I do to protect yourself and my company?
Understand your rights to link to information, quote from articles and blogs, or otherwise use someone else’s creative works.
Understand how and when you can use the brand name of a good or service in your blog, wiki, or online forum.
Develop and implement company policies and procedures for employees using Web 2.0 tools.
Post clear and conspicuous terms and conditions for users.
Implement a comprehensive and expeditious “notice-and-take-down” procedure for the removal of copyrighted material.
Understand your rights and responsibilities under Section 230 of the Communication Decency Act of 1996.
