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NEWSLETTER: Advertising, Marketing & Promotions, Winter 2009

January 7, 2009

Dear Clients, Colleagues and Friends,

Happy New Year. We are pleased to send you the latest edition of our Newsletter, which highlights significant developments in advertising and marketing law over the past few months and provides an update on our firm’s news and events.

We note that 2008, while challenging, was an exciting year for us. The firm handled a number of successful cases, the results of which we are quite proud. Even though 2009 looks to be a somewhat tougher year for us all, we are looking forward to a successful and productive year. We wish the same to all of you.

Here’s the latest…

Legal Developments of Interest

FTC Proposes Significant Changes to Endorsement/Testimonial Guides
The FTC recently proposed significant revisions to its endorsement and testimonial guides that if implemented, will greatly impact advertising utilizing testimonials. As we discuss here, under the proposed revisions, if the advertiser does not have substantiation demonstrating that the results depicted in a testimonial are typical, the advertiser is required to affirmatively state the typical experience, or otherwise have its own empirical data demonstrating that consumers understand the limitations of the testimonial or endorsement.

Internet Marketers of “Free” Products Ordered to Pay $9.9 Million
The FTC continues to crack down on Free Trail Offers sold on the Internet. The FTC’s settlement with Ultralife Fitness highlights this continuing area of enforcement. As we discuss here, this action provides significant guidance as to hot button compliance measures marketers utilizing these types of offers should consider.

Sony Music Pays $1 Million COPPA Fine
Sony Music became the latest major company to pay a significant penalty for violating the Children's Online Privacy Protection Act (COPPA), agreeing to a $1 million dollar civil penalty. Our Mobile Marketer article and our published interview in Behavioral Insider (subscription required) highlight the Do’s and Don’ts of COPPA compliance.

Red Flag ID Theft Rules
To deal with the growing problem of identity theft, the Federal Trade Commission, along with other federal agencies, jointly issued regulations called the “Red Flag Rules” of Identity Theft. Although primarily aimed at financial institutions, the Red Flag Rules have a broad scope that expressly includes creditors such as telecommunications companies and other utilities. Our article, which appeared in Mobile Marketer, highlights the compliance aspects of the Rules. Note that the FTC has announced that it will suspend enforcement of the new “Red Flags Rules” until May 1, 2009 to give companies additional time to develop and implement written identity theft prevention programs.

Trudeau Loses First Amendment Rights and Is Banned From Any Infomercials
A federal district court imposed a three-year ban on Kevin Trudeau participating in the production or publication of any infomercials for products, including any books or publications in which he has an interest. While the FTC requested that judgment be entered for the full gross revenue received, in an unusual twist, the agency alternatively requested only the profit that he made. The court entered judgment for the amount of royalties that the defendant had received, and ordered that sum to be disgorged. Click here for more details.

Court Orders Suppliers Liable For Acts of Marketer
In FTC v. Direct Marketing Concepts, Inc., the FTC obtained summary judgment against the marketers and their supporting firms relating to disease treatment, and weight loss infomercials. Importantly, the federal district court held not only the marketing companies but also the credit card processing intermediary, the media purchasing firm, and the individuals liable for consumer redress.

FTC Clarifies Position on “Forward To a Friend” CAN-SPAM Obligations
The Federal Trade Commission announced that it had approved new rule provisions intended to clarify CAN-SPAM requirements. The comments to the updated rules discuss various fact situations in which a company would (or would not) be responsible as the “sender” in a Forward to a Friend situation which may trigger CAN-SPAM compliance. Our discussion of the inducement aspects of Forward to a Friend can be found here.

Supreme Court Rejects False Advertising Pre-emption Argument
The United States Supreme Court decision in Altria Group, Inc. v. Good, is the latest in a series of cases over the last two decades addressing pre-emption under the Federal Cigarette Labeling and Advertising Act.  The Court held that the Labeling Act did not expressly or impliedly pre-empt claims of fraudulent advertising under the Maine Unfair Trade Practices Act.  As discussed here, this decision allows claims by smokers seeking billions of dollars in damages from tobacco companies to proceed.  Even more broadly, the decision throws a potentially significant roadblock to the pre-emption defense in other cases.

Celebrity Athlete Sues To Get Exclusive Right to His Nicknames
A District Court in Texas has been asked to decide whether an athlete has the exclusive right to his own nicknames. NFL quarterback Vince Young has sued three Texas men claiming that they trademarked the two nicknames most closely associated with him, namely “VY” and “INVINCEABLE”, and are damaging his ability to enter into endorsement agreements.

Olshan Events
Andrew Lustigman to Present at ACI's Advertising Law Conference
Andrew Lustigman to present at ACI's Advertising Law Conference in New York on January 27-28, 2009.  Andrew is presenting on “Engaging in Green Marketing without Running Afoul of Federal and State Guidelines” and is co-chairing the Advanced Claim Substantiation Workshop at the Conference. 

Andrew Lustigman to Present on “The Legal Framework for Marketing Innovative, Synergistic Food/Cosmetic Products” At HBA Global Expo
On March 2, 2009, Andrew Lustigman will present at HBA’s Global X-Ceuticals Expo on the legal framework for Marketing Innovative, Synergistic Food/Cosmetic Products.  This presentation will explore the legal aspects in marketing health-related products, regardless of their claimed category.  The presentation will explore the types of claims which require pre-approval, substantiation issues, and safety concerns. In addition, Andrew will discuss controversial claims, compliance strategies, and regulatory priorities. 

Of Note

Adam Solomon Named Olshan Partner
Olshan is pleased to announce that attorney Adam Solomon has been named a partner in the firm.  Adam concentrates in advertising and promotional marketing compliance and counseling.

Andrew Lustigman Named to 2008 New York Super Lawyers
Andrew Lustigman has been selected for inclusion in Super Lawyers - New York Metro 2008 in his practice area of Media and Advertising. Super Lawyers is a listing of outstanding professionals from more than 70 practice areas who have attained a high degree of peer recognition and professional achievement. More details can be found here.

Value Pricing Alternatives
We also wanted to remind all our clients that the firm is always open to explore value pricing alternatives – fixed fee pricing – on legal matters.  As a pioneering firm in value pricing, we have found that this approach can be cost effective in almost any matter. 

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Please feel free to pass this newsletter on to your friends and colleagues and invite them to join our mailing list.  As always, please feel free to contact us with any comments, questions or recommendations.  

To our valued clients, the attorneys at Olshan remain honored that you have entrusted us with your legal matters.  We will continue to strive to provide you with the most cost-efficient and effective personal legal service in the market. 

We wish everyone a happy, healthy, and prosperous new year

Sheldon S. Lustigman
Andrew B. Lustigman
Scott A. Shaffer
Adam Z. Solomon
Jonathan I. Ezor

This newsletter is a publication of Olshan, a law firm with offices in New York and New Jersey. This newsletter and the referenced articles are intended to provide a general overview of legal issues. It is not intended to cover all laws or to serve as legal advice or as a replacement for specific advice of counsel. The views, opinions, statements, analysis and information contained in this outline do not necessarily reflect the views of Olshan or any of its past, present and future clients. © MMIX by Olshan.

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Originally published by The Lustigman Firm, P.C. and has been re-branded and edited to conform and to correct certain references.


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