Naturally, litigation results from unsupported advertising claims and undefined terms.

The WSJ Corporate Intelligence blog has an interesting article today that highlights the risks inherent in un-vetted advertising claims.  Apparently Proctor & Gamble took issue with “99% Natural” claim that toothpaste maker Hello Products, LLC was making with respect to its toothpastes which come in unusual flavors (for toothpaste) like pink grapefruit mint and mojito mint. Neither the FDA nor FTC have guidelines for what constitutes “natural” or “all natural” products.  In practice, the FDA takes the position that it will “not object[] to the use of the term if the food does not contain added color, artificial flavors, or synthetic substances,” but you are apparently on your own to determine what exactly is or is not a “synthetic substance.”  Because of the regulatory confusion over the meaning of “natural,” litigation over what does or does not qualify often resorts to claims sounding in state false advertising, unfair trade practices, or consumer protection statutes, or alleging common law fraud or breach of warranty.  Some clarity as to what it means to be natural that we can all agree on (or at least rely on) would be helpful from both the consumer and advertiser perspective, much like the USDA’s National Organic Program that tries to put some meaning into that word as used on food labels.  Apparently, though,  it is difficult from a food science perspective  to define a food product that is natural “because the food has probably been processed and is no longer the product of the earth,” according to the FDA.  That seems to have been part of P&G’s problem as the maker of one of the country’s leading toothpastes, Crest,  asserted that some of the Hello Product’s toothpaste’s ingredients, like fluoride, were chemically processed and thus not “natural.”

For its part, Hello Products offered to change its packaging after it had sold its existing stock but that did not satisfy P&G which filed suit and obtained an injunction to block the sale of the offending toothpaste. The upside for those of you in NYC tomorrow is that Hello Products plans to give away the 100,000 tubes it can no longer sell as free samples on the streets of Manhattan. Grab a tube (I recommend the grapefruit) and remember that FTC truth-in-advertising rules require that:

  1. advertising must be truthful and non-deceptive;
  2. advertisers have evidence to back up their claims; and
  3. advertisements are not unfair.

SCOTUS Joins Team Anti-Troll

HiRes

Just a few short months after the house passed the Innovation Act, HR 3309 (now before the Senate Judiciary Committee), a bill pointedly aimed at curbing the practices of non-practicing entities, or patent trolls, as reported earlier on this blog, the Supreme Court has now issued two decisions not as deliberately aimed but nonetheless injurious to the patent troll business model.

Yesterday, Justice Sotomayor delivered two nearly unanimous decisions of the Court (available here and here) that collectively lower the hurdle for prevailing defendants to obtain attorneys’ fees against the plaintiff.  The previous standard, oft implemented by the Federal Circuit, the federal Court of Appeals for patent cases, required “material inappropriate conduct” or both “subjective bad faith” and “objective[] baseless[ness]” on the part of the plaintiff in bringing the case before fees could be awarded against it.  Such conduct is commonly complained of by those targeted by patent trolls, entities named for their practice of acquiring patents in the hopes of collecting damages through infringement lawsuits, but is rarely punished.  Small businesses and individuals who are sued by patent trolls often pay a fee to settle the case rather than incur the expense and exposure of litigation.  Yesterday’s dual Supreme Court decisions may change that. Read More »

Fan Fiction Gets Weird

Popular author L.J. Smith of the Vampire Diaries series was terminated by her publisher and replaced with a ghostwriter. Some fans are content to continue reading the now ghostwritten series. Other fans are buycotting. What did L.J. Smith do? She is writing new Vampire Diaries stories as “fan fiction”. Fan fiction is understood as meaning stories written by amatuer writers based on their favorite book, television or movie characters.
While some media companies routinely prosecute copyright infringement lawsuits against fan works, others have embraced fan fiction, such as the publisher of Fifty Shades of Grey series. Originally fan fiction (or slash fiction)based on the Twilight series, Random House successfully published the books after the author removed the Twilight characters.
The Wall Street Journal reports that Amazon has been making deals with publishers and fan fiction writers for the rights to use characters and fan writing to identify new blockbusters like Fifty Shades.

Gov. Chris Christie’s Four Liter Jersey Traffic Jam

Jimmy FallonIrresistable mash-up by “the Bosses” for the Gov, delighting both my “Jersey Girl” and copyright lawyer personalities.

A new Picasso — and a hefty tax bill.

Jeffrey Gonano of Wexford in western Pennsylvania won the lottery for the 1914 Picasso painting L’Homme au Gibus (Man in the Opera Hat).  Mr. Gonano had purchased one of the 50,000 lottery tickets that had been sold for 100 euros (approximately $137) each.  The lottery was held to benefit two Arts and Cultural Projects in a UNESCO World Heritage city in Lebanon.

However, because the painting is valued at approximately $1 million, the win may come with a tax bill as large as $365,000.  And, unlike a lottery with a cash prize, Mr. Gonano cannot pay the taxes out of the proceeds, unless he decides to sell the painting.  Of course, Mr. Gonano can avoid the tax liability by donating the painting to a charity or museum.  Mr. Gonano is currently exploring his options.

http://www.goerie.com/article/20131223/NEWS06/312239957/Picasso-may-pose-$365000-tax-dilemma-for-raffle-winner

Pushing Patent Trolls Into the Light of Day: Congress Attacks the Practices of Non-Practicing Entities

HiResThe Innovation Act, H.R. 3309, was overwhelmingly passed by the House (325-91) last week.  The Senate version seems poised to pass soon, and the White House is reportedly also in favor.  The legislation was introduced by House Judiciary Committee Chair Bob Goodlatte (R-VA) to address the growing problem of non-practicing entities (NPEs), a.k.a “patent trolls.”

Patent trolls are so named for their practice of acquiring patents that they have no intention of bringing to the market.  Instead, trolls demand damages or licensing fees from unsuspecting businesses, sometimes including consumers, who use a device or method allegedly covered by the troll’s patents.  The Patent Examiner reports that Innovatio IP Ventures, which claims to have a portfolio of patents covering wifi technology, sues businesses such as Caribou Coffee and Panera Bread for providing wifi in their businesses. The trollish penchant for “shell” companies makes it nearly impossible to determine who owns the patents at issue. Read More »

US Supreme Court to take on the patentability of software. Can the decision reduce the incidence of troll attacks?

Mathmatical algorithms are unpatentable. Software is a collection of algorithms expressed in machine code. Under current law, only software that involves a specific machine or physical result. The U.S. Supreme Court accepted cert in a case,  Alice Corporation Pty. Ltd. v. CLS Bank International (docket 13-298), involving financial software to mitigate risk in settlement transactions. The trial court decided the software is unpatentable because it merely uses “the abstract idea of employing an intermediary to facilitate simultaneous exchange of obligations”. the U.S. Court of Appeals for the Federal Circuit split on the decision, teeing it up for the Supreme Court.

Timothy Lee of the Washington Post points out that if the Supreme Court broadly invalidates the software patents, it would allieviate the nuisance suits by ‘non-producing entities’ or ‘trolls’, since most involve software. Would it discourage Congress from its present mission to identify a legislative solution to the troll problem? Read More »

Win a Picasso and Own a Masterpiece! But Hurry!

UK2This is no joke (although it is extremely awesome!):  A drawing will be held on December 18, 2013 for a Picasso entitled  L’Homme au Gibus (Man in the Opera Hat), completed in 1914.  Here is a copy of the painting:

Tickets cost a mere 100 Euro (approximately $135).  Only 50,000 will be sold.  Proceeds will benefit two Arts and Cultural Projects in a UNESCO World Heritage city in Lebanon.  Tickets can be purchased here: http://www.1picasso100euros.com/?lang=en

Good luck!!

Fair use ruling for Richard Prince stands, Supreme Court declines to hear Patrick Cariou’s appeal

richard-prince-ile-de-france-canal-zoneThe US Supreme Court has declined to hear Patrick Cariou’s appeal requesting a rehearing of his case against Richard Prince. The decision came one week after district court Judge Deborah Batts* accepted amicus briefs from the Andy Warhol Foundation for the Visual Arts and the Rauschenberg Foundation encouraging consideration of the opinions of art historians and the broader art community when deciding whether Prince’s “Canal Zone” series infringed on Cariou’s copyright.

It’s not over until it’s over. Read More »

Using the term Natural in food advertising? Products claiming to be ‘au natural’ may need to meet a higher standard

all natural badge“My food is more natural than your food” lawsuits have been bountiful in the last few years. Following this trend is a “food advertising modernization” bill, HR 3147, introduced by U.S. Representatives Pallone and DeLauro, that would require advertisers who claim their products are ‘All Natural’ to prove that the food does not contain synthesized artificial ingredients that mimic natural ingredients, unless such artificial ingredients result from traditional methods of processing food to make food food edible, to preserve food, or to make food safe for human consumption (such as smoking, roasting, freezing, drying and fermenting processes).

Presently,  ‘natural’ can refer only to food products s that can show that no artifical ingredient was added to the product, including food coloring from any source.

While the FDA and Congress sort out the definitions, the Wall Street Journal reports that food advertisers are quietly dropping the ‘All Natural’ claim as ambiguous and prone to law suits.