Advertising Law -- Sep 26, 2013

by Manatt, Phelps & Phillips, LLP

In This Issue:

Julia Child Foundation Whips Up Lawsuit Against Williams-Sonoma

Williams-Sonoma illegally used the name and likeness of the late Julia Child more than 100 times in advertising, marketing, and promotional materials for numerous commercial products, such as pots, pans, cookware, and kitchenware, according to a new suit filed by the Julia Child Foundation in California state court.

Throughout Child’s 40-year career, she “famously refused to allow her name or image to be used to market or sell commercial products, particularly culinary products such as pots, pans, stoves, food brands, etc.,” the Foundation wrote in the suit. Child’s television program, The French Chef, debuted in 1963 and was broadcast nationally for ten years, winning Emmy and Peabody Awards. She authored a total of 18 books, “nearly all of them educational books about food, cooking and the culinary arts,” including Mastering the Art of French Cooking, which launched her career.

To uphold her legacy, the Foundation – which holds the posthumous publicity rights for Child – “has adopted the same policy and generally refuses all requests of companies and brands to allow her name or image to be used in connection with their advertising, marketing or promotion.”

The complaint alleges that Williams-Sonoma “prominently” used Child’s name and photograph in a broad variety of promotional materials in stores, e-mail blasts to customers, on the company’s Web site, and across a spectrum of social media sites that enabled Facebook and Pinterest users to further distribute such imagery. The retailer even “ran a ‘Julia Child Sweepstakes’ [to] further promot[e] its business and products.”

All of these commercial uses of Child’s image were done without permission or compensation, the Foundation said. The suit seeks an injunction against all future use of Julia Child’s name, photograph, likeness, and other indicia of her persona, as well as monetary damages for their unauthorized use. Punitive damages should also be awarded, the suit contended, as the defendant’s actions were willful and with deliberate disregard of her publicity rights.

To read the complaint in The Julia Child Foundation v. Williams-Sonoma, click here.

Why it matters: The Foundation’s complaint alleges that Williams-Sonoma’s unauthorized use of Child’s publicity rights was not just illegal but also goes against Julia Child’s personal beliefs. “Throughout her life and career, Julia Child had many opportunities for commercial advancement, including commercial endorsement and spokesperson opportunities with companies in the food and culinary industry,” according to the complaint. “She could have created a lifestyle brand like Martha Stewart or Oprah Winfrey, and could have become a spokesperson for multi-billion commercial brands in the kitchen, culinary and food industry – brands such as Williams-Sonoma – for large sums of money. Instead, she steadfastly refused all such commercial opportunities and focused her career on public education.”

Google Street View Suit May Continue, Says Ninth Circuit

Rejecting Google’s interpretation of the Wiretap Act, the Ninth U.S. Circuit Court of Appeals said the company could be liable for collecting data from unencrypted Wi-Fi networks while gathering information for its Street View project.

Multiple class action suits were filed against the company and ultimately consolidated in California federal court after Google admitted that, in addition to taking pictures for the online Street View, its data gatherers collected payload data such as personal e-mails, usernames, videos, and documents over a three-year period.

A federal court judge denied Google’s motion to dismiss the suits, and earlier this month the Ninth Circuit affirmed.

Google attempted to defeat the claims by relying upon an exemption in the Act at Section 2510(2)(g)(i). It argued that data transmitted over a Wi-Fi network is an “electronic communication” that is “readily accessible to the general public.” Under Section 2510(16)(A), a “radio communication” is by definition “readily accessible to the general public,” so long as it is not scrambled or encrypted.

But the federal appellate panel disagreed.

The ordinary meaning of “radio communication” does not encompass data transmitted over a wireless network, the court said, despite Google’s contention that a radio communication “refers to any information transmitted using radio waves, i.e., the radio frequency portion of the electromagnetic spectrum.” Such an interpretation would include television broadcasts, Bluetooth devices, avalanche beacons, wildlife tracking collars, and garage door openers, the three-judge panel said. “There is no indication that the Wiretap Act carries a buried implication that the phrase ought to be given a broader definition than the one that is commonly understood.”

Radio communications are predominantly auditory broadcasts, which further excludes payload data such as e-mails and images, which are not a broadcast or auditory, the court added. This reading “yields a coherent and consistent Wiretap Act,” while “Google’s overly broad definition does not.”

Wi-Fi transmissions are geographically limited, the panel said, and “fail to travel far beyond the walls of the home or office where the access point is located.” The peak output of a Wi-Fi network reaches approximately 1 watt, the Ninth Circuit explained, while traditional radio broadcasts typically range from 250 to 100,000 watts. In addition, sophisticated hardware and software are required to intercept and decode payload data.

“Most of the general public lacks the expertise to intercept and decode payload data transmitted over a Wi-Fi network,” the panel wrote. Although the necessary technology is available for purchase, this did not make the data “readily available to the general public” as the phrase is ordinarily understood, the court concluded.

Adopting a contrary position would also limit the protections of the Wiretap Act to recipients of communications who decided to secure their wireless networks, the court noted. The sender of an e-mail “is in no position to ensure that the recipient – be it a doctor, lawyer, accountant, priest, or spouse – has taken care to encrypt her own Wi-Fi network. Google, or anyone else, could park outside of the recipient’s home or office with a packet sniffer while she downloaded the attachment and intercept its contents because the sender’s ‘radio communication’ is ‘readily accessible to the general public’ solely by virtue of the fact that the recipient’s Wi-Fi network is not encrypted,” the panel wrote. “Surely Congress did not intend to condone such an intrusive and unwarranted invasion of privacy when it enacted the Wiretap Act ‘to protect against the unauthorized interception of electronic communications.’ ”

To read the decision in Joffe v. Google, click here.

Why it matters: Calling the opinion “disappointing,” a Google spokesperson said the company is considering its legal options. The company settled similar charges brought by 38 state attorneys general in March for $7 million and an agreement to stop collecting payload data. The federal appellate panel’s decision demonstrated the dated nature of the Wiretap Act, which deals with traditional radio services and lacks guidance on modern amenities such as cellular phones and Wi-Fi networks. How the Act would apply to cell phones or a radio station streamed over the Internet remains an open question, the Ninth Circuit noted.

It's All About the First Amendment: Lance Armstrong Wins Dismissal in False Ad Suit Over Books

A federal court judge in California sided with Lance Armstrong and dismissed a class action that alleged he falsely advertised in his autobiographies that he never took performance-enhancing drugs.

In the January 2013 complaint filed after Armstrong confessed to years of doping, class members said they never would have purchased his books – including It’s Not About the Bike and Every Second Counts – if they knew the story was a “fairy tale.” The suit also challenged the marketing materials and other promotional efforts accompanying the books, which the class contended should be classified as unprotected commercial speech.

But U.S. District Court Judge Morrison C. England ruled otherwise, granting Armstrong’s anti-SLAPP (“strategic lawsuits against public participation”) claim in his motion to dismiss. California’s anti-SLAPP law is designed to prevent meritless suits that seek to chill the valid exercise of speaking out on issues of public interest.

Armstrong’s books – first his autobiographies, followed by three others – constituted conduct in furtherance of the exercise of his First Amendment rights, the court said. As a person in the public eye and a topic of widespread public interest, Armstrong’s writings about his life, image, cycling career, and doping were directly connected to the interest about him.

Anti-SLAPP protection does extend to illegal acts committed by defendants. The court concluded, however, that Armstrong’s lies about his use of performance-enhancing drugs did not amount to illegal conduct that would not be shielded by the anti-SLAPP statute. “Plaintiffs fail to provide conclusive evidence that the conduct at issue – Armstrong’s statements that he did not dope, the content of the book, and the promotional materials for the book – is criminally illegal,” the court said. Although the plaintiffs pointed to Armstrong’s smuggling or trafficking of drugs, “drug trafficking and criminal conspiracy is simply not the conduct at issue in this case. The conduct at issue is the speech about the book and Armstrong’s speech about whether he used drugs. Armstrong’s lies about his use of drugs are simply not criminal conduct.”

The putative class members also failed to establish a likelihood of success on their claims, as required by the statute. Statements contained within the books were not commercial speech, the court said, and therefore entitled to the full protection of the First Amendment. In declining to find that Armstrong himself was a “brand” or “product,” the court ruled that his public statements denying his use of drugs were also noncommercial. Finally, the promotional statements relating to Armstrong’s books – despite the court’s determination that they contained “mixed content” of both a commercial and noncommercial nature – were also entitled to free speech protections because they were “inextricably intertwined” with the otherwise fully protected speech.

“The economic reality in this age of technology is that publishing companies and authors must promote the books they publish and write in order to sell them, if publishing houses are to continue to operate and books are to continue to be sold in paper and hard copies,” the judge wrote. The judge found hard to separate the promotional materials for the books from the books themselves. “As such, the promotional materials relating to the books are inextricably intertwined with the books’ contents, which is non-commercial speech. Thus, these promotional materials are also entitled to full First Amendment protection as non-commercial speech.”

Fraud claims similarly did not pass judicial muster. “Plaintiffs here provide absolutely no authority for the notion that the words ‘biography’ and ‘nonfiction’ are guarantees that the work contains only statements that are one hundred percent factual,” Judge England wrote. “Indeed, speaking about oneself is precisely when people are most likely to exaggerate, obfuscate, embellish, omit key facts, or tell tall tales.”

To read the decision in Stutzman v. Armstrong, click here.

Why it matters: When balancing the First Amendment and public interest in protecting consumers from books containing false statements, Judge England swung toward “guarding the right to free speech and the free flow of ideas.” He did, however, grant the plaintiffs leave to amend their complaint.

California Legislation on DNT Notice, Minors on Social Media

California Governor Jerry Brown recently approved legislation that will allow minors to delete social media content. He is currently considering a second piece of legislation passed by the state Senate and Assembly that would require sites to disclose whether or not they recognize Do Not Track requests.

SB 568 recognizes that all kids make mistakes and that social media means those mistakes could last forever. “Too often a teenager will post an inappropriate picture or statement that in the moment seems frivolous or fun, but that they later regret,” the bill’s sponsor, Sen. Darrell Steinberg (D-Sacramento), said in a statement.

Intended to protect against the mistakes of youth, the law would allow those under the age of 18 to delete upon request material posted online to social media sites like Facebook and other sites. It would also prohibit sites from compiling the personal information of minors to market products or services they cannot otherwise legally purchase or use, such as alcohol or tobacco.

The bill faced limited opposition prior to passage. Companies such as Facebook and Google took a neutral position while the Center for Democracy and Technology expressed concern that the law could create a chilling effect on operators creating content for minors, with some sites possibly blocking access to those under the age of 18 to avoid dealing with the deletion requirements.

The group’s stance did not impact the bill’s passage, with the Senate voting unanimously to approve the legislation.

Both the state Senate and Assembly similarly passed AB 370, a disclosure law that would require Web site operators to reveal how they respond to Do Not Track “signals or other mechanisms that provide consumers a choice regarding the collection of personally identifiable information about an individual consumer’s online activities over time and across different Web sites or online services.”

Sponsored by California Attorney General Kamala Harris, the bill is intended to raise awareness of online behavioral tracking, she said, and allow consumers to make an informed choice about whether or not to use a certain service or site depending on its policies.

The amendment to the California Online Privacy Protection Act does not impose a DNT standard, but merely requires disclosures. A Web site that fails to set forth its practices would face a warning and 30 days to achieve compliance. 

To read SB 568, click here.

To read AB 370, click here.

Why it matters: SB 568 was signed by Governor Brown on September 23 and will take effect January 1, 2015. AB 370 will likely present some challenges for Web site operators. With continuing debate over the definition of what DNT entails, Web sites and apps should make a careful decision about disclosing how they respond to DNT signals.

Noted, Quoted and Socially Promoted . . . Marc Roth Discusses Upcoming FTC Workshop on Legal Issues Associated with Sponsored Advertising

In a post for Manatt Digital Media’s blog, Manatt partner Marc Roth notes with interest the upcoming FTC workshop on December 4 involving potential risks for consumers associated with “native” or “sponsored” advertising and what to expect from the FTC on this issue going forward.  Click here to read the full post.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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