Edited by
Jeffrey D. Knowles 
and
Gary D. Hailey
News
UGG, Hermes Score Victories Against Counterfeiters
This week, two leading apparel brands, Hermes and UGG Boots, were victorious against websites selling counterfeit goods.
Hermes won $100 million and permanent injunctions against websites selling counterfeit Birkin and Kelly bags online. Later in the week, UGG's parent company, Deckers Outdoor Corp., won $686 million in lawsuits against more than 3,000 China-based websites selling counterfeit UGGs.
In both cases, many of the funds awarded were seized from the defendants' PayPal accounts, a practice that was previously not possible. The seizure of funds from PayPal accounts was done in accordance with Operation In Our Sites, an initiative by U.S. Immigration and Customs Enforcement's Homeland Security Investigations and the National Intellectual Property Rights Coordination Center.
The initiative allows the Department of Justice to recover funds collected via PayPal from defendants as well as money transferred from PayPal accounts to bank accounts in China. Stan Abrams, a Beijingbased IP attorney, writes in a Business Insider column that this is a critical development in anticounterfeiting because, otherwise, it would be nearly impossible to recover money from defendants.
Click here to read Abrams' Business Insider column.
Click here to read coverage of the cases by the Fashion Law Blog.
FTC Announces Preliminary Agenda for "DotCom Disclosures" Workshop
On May 2, the Federal Trade Commission (FTC) released the preliminary agenda of a one-day public workshop to consider the need for new guidance about disclosure for online advertisers. The event will be held on Wednesday, May 30, 2012.
According to the FTC's press release, the new guidance is likely to address technological advancements and marketing developments that have emerged since the FTC first issued its online advertising disclosure guidelines known as "Dot Com Disclosures" 12 years ago. The event is free and open to the public and will also be webcast.
Click here to view the preliminary agenda and additional information about the event.
Analysis
CA Law, FTC Regulation Give Cause for Care With "Made in USA" Claims
In the current economic climate, making the claim that a product is "Made in USA" can be advantageous for sales, write Venable partners Jeffrey D. Knowles, Randal M. Shaheen and Amy Ralph Mudge in the May 2012 edition of Electronic Retailer magazine.
However, they explain that marketers should take care when making "Made in USA" claims so that their claims do not run afoul of a 1997 FTC Enforcement Policy Statement or California state law. Under FTC guidance, marketers must be able to show that "all or virtually all" of the product was made in the United States in order to be able to make an express or implied "Made in USA" claim.
While the FTC's standard leaves room for some de minimis foreign content, the California law is much more strict. It prohibits the use of "Made in USA" or similar words when the "merchandise or any article, unit, or part thereof, has been entirely or substantially made, manufactured, or produced outside of the United States."
Knowles, Shaheen and Mudge write that litigation and enforcement actions concerning "Made in USA" are common, noting a pair of relatively recent California class actions as well as numerous FTC enforcement actions.
Click here to read their column, which begins on page 41 of the publication.
Court Refuses to Dismiss Celebrity Endorsement Breach of Contract Case
Most endorsement contracts have a morals clause designed to give the marketer an excuse to terminate an endorsement deal if they think the celebrity has done something that might reflect poorly upon the company, write Venable partners Randal M. Shaheen and Amy Ralph Mudge in a recent post on Venable's advertising law blog, www.allaboutadvertisinglaw.com.
A judge recently refused to dismiss a lawsuit brought by Pittsburgh Steelers running back Rashard Mendenhall against Champion, a Hanesbrands company, after Champion terminated his endorsement contract because of Tweets concerning Osama bin Laden and questioning whether the collapse of the Twin Towers was the result of hijacked planes.
Mendenhall's morals clause barred actions that would tend to bring him "into public disrepute, contempt, scandal or ridicule, or tending to shock, insult or offend a majority of the consuming public." The judge found that the morals clause could not be triggered simply because the company disagreed with Mendenhall's comments. Instead, the judge held that further factual development was necessary so that the court could make a finding as to the nature of the public's response to Mendenhall's Tweets. In other words, according to the judge, it is not enough for the company to think that an endorser has offended many people; the company must also show it factually, at least under the wording of the morals clause in question.
Click here to read the post by Shaheen and Mudge on Venable's advertising law blog, www.allaboutadvertisinglaw.com.
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