Behind the Scenes

Arent Fox's advertising law blog - latest news and trends in advertising, data security & privacy, and fashion & entertainment.

Behind the Scenes
Advertising, Promotions, Sweepstakes & Contests
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Deal or No Deal? Class Action Alleges Macy’s Offered Misleading Sale Prices

What’s the News?

Macy’s, Inc. and subsidiary Bloomingdale’s, Inc. were recently served with a class action complaint alleging that the retail chains misled consumers with a “phantom pricing scheme” that inflated the savings available on items marked for sale. According to the complaint, the stores listed artificially high “regular” prices on “sale” items, increasing, by comparison, the savings that consumers believed they were receiving. This is the latest of several recent class action lawsuits attacking retail pricing strategies, and it serves as a reminder to retailers nationwide to be careful when using price comparisons.

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Advertising
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Is It or Isn’t It? FTC Issues Guidance to Companies on Native Advertising

The Federal Trade Commission recently issued its long-anticipated guidance on native advertising. While the policy statement and its related guidance are new, the FTC emphasized that it has been regulating native advertising under Section 5 of the FTC Act since 1967 and that this policy document and guidance is a summary of the principles that it has developed over the years. While the FTC has been regulating native advertisements for decades, the issuance of this guidance indicates that the FTC will be making regulation of native advertising a priority in 2016.
 
Native advertising – as defined by the FTC – is advertising that matches the design, style, and behavior of the digital media in which it is disseminated. The main problem with respect to native advertising arises when the content is formatted in a way that suggests or implies it is not an advertisement.

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Health Privacy & Security, Advertising
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Lumos Labs Settles With FTC Over Brain Training Program Claims

The Federal Trade Commission announced this week that Lumos Labs had agreed to settle false and deceptive advertising claims related to the company’s promotion of its “Lumosity” cognitive training programs (commonly referred to as “brain training”). Under the FTC’s Settlement Order, Lumos Labs will pay $2 million in consumer redress and notify its on-line subscribers of the FTC settlement, as well as provide them with directions on how to cancel their Lumosity auto-renewal subscriptions.

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Advertising
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FTC Says Retailers Bamboozled Customers with Misleading “Bamboo” Products

What’s the News?

The Federal Trade Commission has a reached a settlement agreement with several major retailers, including Nordstrom, Bed Bath & Beyond, and JCPenney, over claims that they improperly labeled and advertised rayon products as being made of bamboo. According to the FTC, rayon—a chemically manufactured fiber that is sometimes created from bamboo—is not the same as bamboo, making the companies’ “bamboo” claims improper. In addition to injunctive relief, the companies have agreed to pay over $1 million dollars under the settlement. 

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Media & Entertainment
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“World of Warcraft” Creator Takes Battle to Court over Game’s Characters

What’s the News?

A federal judge in the Northern District of California recently dismissed a complaint in which video game producers claimed that characters from their games had been misappropriated by competing developers, in violation of copyright law. While characters are, in some cases, entitled to copyright protection, the court held that plaintiffs in such cases must state with considerable specificity which characters were allegedly infringed, and why those characters are copyrightable. General allegations of idea theft, the court explained, will not survive a motion to dismiss. 
 

Background

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Publicity Rights
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Imitation the Sincerest Form of Flattery? Court Dismisses Video Gamer’s Right of Publicity Claim

What’s the News? 

A judge in New Jersey federal district court recently dismissed a lawsuit brought against The Cartoon Network by a renowned video gamer. In particular, the plaintiff claimed in Mitchell v. The Cartoon Network, Civ. No. 15-5668 (D.N.J., November 20, 2015), that the network violated his right of publicity by depicting an animated version of him, without permission, in an episode of The Regular Show. The court, however, disagreed, holding that the network’s representation of the plaintiff was a parody entitled to First Amendment protection.

 

Background on the Case

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E-Commerce
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Legal Rollercoaster in New York for DraftKings and FanDuel

After a difficult November, daily fantasy sports (DFS) operators will need to buckle up for an even more challenging road ahead. Things looked grim for the DFS industry last month, after New York Attorney General Eric T. Schneiderman delivered cease-and-desist orders to FanDuel and DraftKings, ordering them to stop taking bets in New York. Though the DFS industry had faced obstacles before, this was the strongest blow against them, especially in the state where FanDuel is headquartered, and from which the largest number of DFS players hail. But both sites vowed to fight back, and have been embroiled in a tough legal battle ever since.

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Advertising, User-Generated Content
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After SCOTUS Declines CDA Defamation Appeal, Yelp Gives Court 5 Star Rating

The Lead

The Supreme Court gave Yelp and other interactive computer service providers reason to celebrate recently when it quietly declined to hear an appeal of a case charging Yelp with defamation in connection with one of the consumer reviews posted on the site. In refusing to hear the appeal, the Court left in place a Fourth Circuit decision that held that interactive computer service providers like Yelp cannot be held legally responsible for information created and developed by third parties.
 

The Facts

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Health Privacy & Security, Mobile Marketing, Advertising
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National Advertising Initiative Updates Rules for Data Collection on Mobile Apps
The Network Advertising Initiative (NAI), an advertising industry trade group for third-party advertisers, recently released the 2015 update to its Mobile Application Code. The App Code is a set of self-regulatory principles governing the data collection practices of NAI member companies in the context of mobile app advertising. The purpose of the 2015 update is to clarify certain obligations for NAI member companies under the App Code. 
 

The App Code

 
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Arent Fox LLP, founded in 1942, is internationally recognized in core practice areas where business and government intersect. With more than 350 lawyers, the firm provides strategic legal counsel and multidisciplinary solutions to clients that range from Fortune 500 corporations to trade associations. The firm has offices in Los Angeles, New York, San Francisco, and Washington, DC.