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All Native Advertising is Not Equal: Why that Matters Under the First Amendment and Why it Should Matter to the FTC – Part V

In this five part series, originally published in the Summer 2014 edition of the Media Law Resource Center Bulletin,[1] we take an in-depth look at the native advertising phenomenon and the legal issues surrounding the practice.  After canvassing the many faces of native advertising and the applicable law, the series ultimately examines the pervasive assumption that all native advertising is, and should be regulated as, “commercial speech.”  This assumption presumes that all native advertising is equal under the eyes of the law, and we come to the conclusion that it probably isn’t. Native advertising that is closer to pure content than pure commercial speech may deserve greater or even full First Amendment protection, which would carry significant implications for government regulation[2].

Part 1: Introduction to Native Advertising

Part 2: Early Native Advertising and the Current FTC Regulatory Landscape

Part 3: Evolution of the Commercial Speech Doctrine

Part 4: Distinguishing Commercial versus Non-Commercial Speech

Part 5 applies the commercial speech doctrine to native advertising and asks whether certain forms of native may be protected by the First Amendment.

—PART V—

Not all Native Advertising May Be Commercial Speech under the First Amendment

If there is one thing clear from the case law, it is that the commercial speech analysis under the First Amendment is a fact intensive one that does not clearly lend itself to bright lines, especially when dealing with mixed commercial and noncommercial speech. Native advertising also does not lend itself to a single categorization as it can take a number of forms. See Part I.A., supra. As discussed below, the appropriate level of First Amendment protection for native advertising as commercial or noncommercial speech should turn on the nature of the communication as opposed to a catch-all net. [3]

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Another Step in the Long March from Campbell v. Acuff-Rose toward Fair Use Free-for-All?

Fox News Network, LLC v. TVEyes, Inc., 2014 WL 4444043 (S.D.N.Y. Sept. 9, 2014)

TVEyes is a media-monitoring subscription service that “records the entire content of television and radio broadcasts and creates a searchable database of that content.” This service allows subscribers to search keywords or phrases to determine and review an aggregation of instances of the search term appearing in the media. Subscribers include businesses and governmental agencies such as the White House, United States Army, and local and state police departments; the service is not available to members of the general public. Clips are limited to ten minutes in length, and a majority of the clips are two minutes or less; users are required to agree to use the clips for internal purposes only.

Fox News took issue with TVEyes’ commercialization of its copyrighted broadcasts, and sued for infringement. It contended that TVEyes’ service would have a detrimental effect on the existing market for rebroadcasts of its copyrighted content, which Fox News made available online and also licensed to third parties. Continue Reading

All Native Advertising is Not Equal: Why that Matters Under the First Amendment and Why it Should Matter to the FTC – Part IV

In this five part series, originally published in the Summer 2014 edition of the Media Law Resource Center Bulletin,[1] we take an in-depth look at the native advertising phenomenon and the legal issues surrounding the practice.  After canvassing the many faces of native advertising and the applicable law, the series ultimately examines the pervasive assumption that all native advertising is, and should be regulated as, “commercial speech.”  This assumption presumes that all native advertising is equal under the eyes of the law, and we come to the conclusion that it probably isn’t. Native advertising that is closer to pure content than pure commercial speech may deserve greater or even full First Amendment protection, which would carry significant implications for government regulation[2].

Part 1: Introduction to Native Advertising

Part 2: Early Native Advertising and the Current FTC Regulatory Landscape

Part 3: Evolution of the Commercial Speech Doctrine

Part 4 below examines the important legal distinction between “Commercial Speech” and “Non-Commercial / Inextricably Intertwined Speech” 

—PART IV—

Commercial and Noncommercial Inextricably Intertwined Speech

The Bolger court found that the mailings constituted commercial speech “notwithstanding the fact that [informational pamphlets] contain[ed] discussions of important public issues.”[3] Advertising that “links a product to a current public debate” is not automatically transformed into constitutionally protected noncommercial speech.[4] This is because “a company has the full panoply of protections available to its direct comments on public issues, so there is no reason for providing similar constitutional protection when such statements are made in the context of commercial transactions.”[5] And in that circumstance, “advertisers should not be permitted to immunize false or misleading product information from government regulation simply by including references to public issues.”[6] Continue Reading

Apparel Designs and the “Metaphysics” of Copyright Protection

Varsity Brands, Inc. v. Star Athlectica, LLC, 110 U.S.P.Q.2d 1150 (W.D. Tenn. 2014)

Metaphysics is usually thought to be the province of philosophers or theologians.  A recent decision by a U.S. District Court in Tennessee, Varsity Brands, Inc. v. Star Athletica, LLC, 110 U.S.P.Q.2d 1150 (W.D. Tenn. 2014), reminds us that copyright law can also require courts to confront some pretty thorny metaphysical issues in distinguishing between copyrightable expression and non-copyrightable utilitarian designs.  As Professor Paul Goldstein has written, “[o]f the many fine lines that run through the Copyright Act, none is more troublesome than the line between protectable pictorial, graphic and sculptural works and unprotectible utilitarian elements of industrial design.”

Section 101 of the Copyright Act frames the distinction between copyrightable and utilitarian works.  The Copyright Act defines “pictorial, graphic, and sculptural works” to include “two-dimension and three-dimensional works” but makes clear that copyright protection does not extend to “their mechanical or utilitarian aspects,” and further states:

“the design of a useful article . . . shall be considered [protected by copyright] only if, and only to the extent that such design incorporates pictorial, graphic, or sculptural features that can be identified separately from, and are capable of existing independently of, the utilitarian aspects of the article.”   Continue Reading

All Native Advertising is Not Equal: Why that Matters Under the First Amendment and Why it Should Matter to the FTC – Part III

In this five part series, originally published in the Summer 2014 edition of the Media Law Resource Center Bulletin,[1] we take an in-depth look at the native advertising phenomenon and the legal issues surrounding the practice.  After canvassing the many faces of native advertising and the applicable law, the series ultimately examines the pervasive assumption that all native advertising is, and should be regulated as, “commercial speech.”  This assumption presumes that all native advertising is equal under the eyes of the law, and we come to the conclusion that it probably isn’t. Native advertising that is closer to pure content than pure commercial speech may deserve greater or even full First Amendment protection, which would carry significant implications for government regulation[2].

Part 1: Introduction to Native Advertising

Part 2: Early Native Advertising and the Current FTC Regulatory Landscape

Part 3 below provides a quick overview of the commercial speech doctrine the protections traditionally afforded to advertisers by the First Amendment

 

—PART III—

Commercial Speech and the First Amendment

One question that curiously has only sporadically come up in the native discussion is the level of First Amendment protection that should be afforded to such speech. From a constitutional and regulatory perspective, the critical question is whether native is considered “commercial” speech under Supreme Court precedent. If native is considered commercial speech, then government regulations are subject to intermediate judicial scrutiny. If native is considered noncommercial, then government regulations are subject to the more heightened strict scrutiny standard.[3] This section provides a primer on the First Amendment and commercial speech before turning to its application to Native Advertising. Continue Reading

All Native Advertising is Not Equal: Why that Matters Under the First Amendment and Why it Should Matter to the FTC – Part II

Editor’s Note: This blog post was originally published on September 8, 2014, courtesy of iMedia Connection’s Blog. It is repurposed with permission.

In this five part series, originally published in the Summer 2014 edition of the Media Law Resource Center Bulletin,[1] we take an in-depth look at the native advertising phenomenon and the legal issues surrounding the practice.  After canvassing the many faces of native advertising and the applicable law, the series ultimately examines the pervasive assumption that all native advertising is, and should be regulated as, “commercial speech.”  This assumption presumes that all native advertising is equal under the eyes of the law, and we come to the conclusion that it probably isn’t. Native advertising that is closer to pure content than pure commercial speech may deserve greater or even full First Amendment protection, which would carry significant implications for government regulation[2].

Part 1: Introduction to Native Advertising

Part 2 below examines the genesis of native advertising and how existing FTC regulations may be applicable to the practice today. 

— PART II —

The Early Days of Native: Advertorials, Infomercials and Hybrid Ads

With all the hype surrounding native, you would think it is a new development. However, native advertising has actually been around in one form or another for over a century.[3] Some have cited so-called “reading notices” in the late 19th century as the genesis of sponsored content.[4] In this pre-FTC era, these reading notices were essentially paid news stories mentioning a brand or company.  These practices were then followed by what some would say was the first golden age of native if you will, the early days of radio. Programs like the Texaco Star Theater,[5] sponsored by the Texaco Oil Company (now Chevron), presented sponsored content as long-form radio dramas. A generation later, with more and more newspapers and magazines relying on ads to generate revenue, the FTC questioned whether restaurant ads in the format of news articles that failed to identify themselves as ads to consumers required disclosure.[6] A generation after that brought the TV infomercials and advertorials that plagued the late night TV landscape of the 80’s and 90’s. Many view native today as simply the next evolution of print and television ad practices often dubbed as “hybrid advertising” by regulators. Continue Reading

All Native Advertising is Not Equal: Why that Matters Under the First Amendment and Why it Should Matter to the FTC – Part I

Editor’s Note: This blog post was originally published on September 2, 2014, courtesy of iMedia Connection’s Blog. It is repurposed with permission.

In this five part series, originally published in the Summer 2014 edition of the Media Law Resource Center Bulletin,[1] we take an in-depth look at the native advertising phenomenon and the legal issues surrounding the practice. After canvassing the many faces of native advertising and the applicable law, the series ultimately examines the pervasive assumption that all native advertising is, and should be regulated as, “commercial speech.” This assumption presumes that all native advertising is equal under the eyes of the law, and we come to the conclusion that it probably isn’t. Native advertising that is closer to pure content than pure commercial speech may deserve greater or even full First Amendment protection, which would carry significant implications for government regulation[2].

Part 1 below provides an overview of the series and introduces the concept and practice of native advertising.

— PART I —

Overview of the Five Part Series

Last December, the Federal Trade Commission held a workshop entitled “Blurred Lines: Advertising or Content” to address the latest and greatest darling of the digital media advertising world – Native Advertising, otherwise known as sponsored content, sponsor generated content, branded content, brand journalism, or some would say, the less flattering infomercial or advertorial. The FTC Workshop capped a year where Native Advertising moved to the forefront of the publishing and advertising industries and the FTC. On its surface, much of the debate at the FTC Workshop and elsewhere centers on deception, namely whether consumers can distinguish between paid ads and editorial content. As FTC Chairwoman Edith Ramirez put it: “while native advertising may bring some benefits to consumers, it has to be done lawfully…by presenting ads that resemble editorial content, an advertiser risks implying, deceptively that information comes from a non-biased source.” This may hold true for certain forms of native advertising but maybe not for all. As the FTC Workshop industry panelists explained, native advertising covers a broad range of material, from in feed ads for products, to editorial content that may not even reference a product or a brand. To a certain extent, the native advertising regulation discussion presumes that all native advertising constitutes commercial speech under the First Amendment. However, whether native is classified as “commercial” is a profound legal determination as commercial speech is traditionally subject to less First Amendment protection and more regulation than other forms of more protected speech. The current debate therefore begs the underlying constitutional question—is all native advertising actually commercial speech?

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Third Circuit Rejects Presumption of Irreparable Harm in Lanham Act Cases

The Third Circuit ruled in Ferring Pharmaceuticals v. Watson Pharmaceuticals on August 26 that “a party seeking a preliminary injunction in a Lanham Act case is not entitled to a presumption of irreparable harm but rather is required to demonstrate that she is likely to suffer irreparable harm if an injunction is not granted.” (Slip op. at 21.)

The Third Circuit observed that while it had never recognized such a presumption in false advertising cases, the presumption had long been applied in trademark infringement cases. However, the presumption is no longer tenable in light of the Supreme Court’s rejection of categorical rules that would replace the traditional four-factor test for injunctions in eBay, Inc. v. MercExchange, 547 U.S. 403 (2006), and requirement in Winter v. NRDC, 555 U.S. 7 (2008) that a party seeking a preliminary injunction must demonstrate a probability, not possibility, of irreparable harm.

Although eBay had arisen in the patent context, the court found its reasoning equally applicable to Lanham Act cases, joining the Ninth Circuit in so finding. See Herb Reed Enters. v. Fl. Entm’t Mgmt., 736 F.3d 1239 (9th Cir. 2013). A petition for a writ of certiorari is pending in Herb Reed Enterprises. INTA has submitted an amicus brief in support of a grant of cert.

Addressing Section 101 Issues Through Reissue

The contraction of patent eligible subject matter under 35 U.S.C. 101 that Alice, Mayo, Bilski, and other recent court cases have triggered has placed a cloud of uncertainty over a large number of patents.  [1]  Fortunately, though, the law provides patent owners with a process for taking remedial steps to address Section 101 risks in their patent portfolios.  A viable remedial measure that may help minimize subject matter eligibility attacks is filing a reissue application. This article briefly discusses patent eligibility and how a reissue may be a good way to address the negative impact of these recent cases on issued patents.

Judge Moore’s warning that Alice “is the death of hundreds of thousands of patents, including all business method, financial system, and software patents as well as many computer implemented and telecommunications patents…” looks more and more like an accurate assessment of Alice’s impact. [2]  Since Alice was decided earlier this summer, the Federal Circuit has affirmed summary judgment of invalidity on patent eligibility grounds in Planet Bingo v. VKGS (Fed. Cir. 2014) available here) and, remarkably (at least to this author) affirmed judgment of invalidity in another case based on the pleadings.  See buySAFE v. Google (Fed. Cir. 2014) available here.  The USPTO has been at it as well, issuing examination guidelines in light of Alice as we have reported here and hereAlice and its growing progeny have left us with the following test, although vague, for patent eligibility under Section 101: (1) determine whether the patent claim is directed to subject matter in one of the three excluded categories (abstract idea, law of nature, or natural phenomena), and (2) if so, determine whether the additional elements of the claim supply an inventive concept that is significantly more than the ineligible matter itself.  Recitation of a general purpose computer, in and of itself, is not normally enough to supply the so-called inventive concept to a claim directed to patent ineligible matter. [1]  A reissue application may be an avenue to add the so-called “inventive concept” to a claim with patent eligibility risk under Alice. Continue Reading

Challenging Delegated Top-Level Domains: ICANN’s Trademark Post Delegation Dispute Resolution Procedure

This year, hundreds of new generic top-level domains (gTLDs) are changing the landscape of the Internet.  The long-awaited result of ICANN’s new gTLD program, top-level domains such as .NYC, .WINE, and .WTF will now join the familiar ranks of domains such as .COM and .NET.  As we’ve written about previously, ICANN provided brand owners, trademark holders, and distinct communities the opportunity to object to proposed gTLDs before they were approved or “delegated” to registry operators.  The window for filing these objections ended in March of 2013 and the final objections were resolved in early 2014.  While some top-level domains were successfully blocked by this objection process, the majority of objected-to domains were cleared for delegation.  However, even though ICANN’s gTLD Objection Procedure has closed, brand owners may now have a second opportunity to object to top-level domain registry operators’ complicity or participation in trademark infringement, whether stemming from use of a gTLD string itself or second-level domains registered in the domain. Continue Reading