Ad Law Access : Washington D.C. Advertising Lawyer & Attorney : Kelley Drye & Warren Law Firm : New York, Chicago, Connecticut, New Jersey, Brussels

On June 23, 2011, the Supreme Court rendered its decision in Pliva, Inc. v. Mensing holding that FDA regulations governing generic drug products directly conflict with and preempt state laws that would require generic drug manufacturers to modify the FDA-authorized labeling for their products to provide "adequate warnings" as defined by state law. The Court distinguished its earlier decision in Wyeth v. Levine, 21 U.S.C. 555 (2009), which held that similar state law requirements were not preempted by federal drug regulations that apply to brand-named prescription drug products. Justice Thomas authored the majority opinion, which reverses rulings by the Fifth and Eighth Circuits, and Justices Ginsburg, Breyer, and Kagan joined Justice Sotomayor's dissenting opinion.

The federal preemption decision is helpful to generic drug manufacturers, and the ruling has broader implications for companies that confront conflicts between the requirements imposed by federal versus state law. Click here for more information about this case.

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The rise of smartphones, wifi hotspots, and high-speed data networks has spurred new technology-based business models and the exponential growth of consumer information online. Chief among new technologies, the use of mobile applications—“apps”—has exploded in the past few years. From near-constant posts on Facebook to attacking the green pigs on Angry Birds, consumers have opened their hearts and wallets to mobile apps. While the upside is great, companies and developers considering a mobile app should also be mindful of the legal and business pitfalls of mobile apps and implement a process to sidestep common challenges.

A new article from E-Commerce Law & Policy, “Avoiding Trouble When Adding an App to the Business Model,” outlines several of these potential pitfalls and the best practices to avoid them.

For more information about this uncharted legal territory and emerging "rules for the road" for developing and marketing mobile apps, click here to view and listen to a recording of the Kelley Drye webinar, “Mobile Applications: Privacy and Data Security Considerations.”

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The Consumer Product Safety Commission ("CPSC") has hired Andrew Kameros as Assistant Executive Director of Compliance and Field Operation, the office that oversees product safety recalls and plays a significant role in rulemaking and enforcement proceedings.  Prior to joining the CPSC, Mr. Kameros was General Counsel and Director of Compliance at the lobbying firm Cassidy and Associates.  He helped clients develop ethics, disclosure and compliance programs and systems regarding lobbying activities.

Mr. Kameros joined Cassidy after nineteen years as a federal prosecutor with the U.S. Department of Justice, dealing with a range of cases including financial fraud, tax issues, and white collar crimes.  During his last four years at Justice he served as an assistant chief, supervising a staff of twenty prosecutors.  He obtained his undergraduate degree from Colgate University in 1982 and his law degree from American University in 1985.  Jay Howell had been the acting head of Compliance and will continue as the head of CPSC's Hazard Identification and Reduction.

Companies that regularly appear before the CPSC should watch carefully as Mr. Kameros begins to leave his mark on the agency.

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Consumers around the world are increasing their use of dietary supplements. In the United States alone, consumers spend almost $27 billion per year on dietary supplements, and the EU and China are also rapidly developing and promising markets for supplements. With growing demand, dietary supplement companies have diversified their product portfolios and expanded their manufacturing and sales distribution to existing and emerging markets. In so doing, these same companies are confronted with myriad regulations that apply to the registration, sale and advertising of their products, each of which must be evaluated on a country by country or regional basis, as in the case of the EU.

A new article from the Food and Drug Law Institute Update magazine explores the differences between the U.S. system of regulating sale and advertising of dietary supplements with those of the EU and China, which have regulations that limit products and claims to defined categories in the name of consumer protection. Click here to access the full article, “It’s All Local: What You Need to Know About the Law Relating to the Marketing of Dietary Supplements in the United States, the European Union and China,” with permission from FDLI.

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On Tuesday, July 19, 2011, President Obama announced that he will nominate Maureen Ohlhausen to serve as a Commissioner with the Federal Trade Commission (“FTC”). Ms. Ohlhausen has broad experience in the areas of online privacy and consumer information protection, and the nomination underscores the increasing importance of such issues to the Commission.

Currently, Ms. Ohlhausen is a partner at Wilkinson Barker Knauer LLP, where she works in the firm’s privacy, data protection, and cybersecurity practice. Prior to joining the firm, she served as policy counsel for the Business Software Alliance trade group. From 1997 to 2008, Ms. Ohlhausen worked at the FTC, including as Director of the Office of Policy Planning, where she handled issues related to e-commerce, advertising, and technology. During her tenure with the Commission, she led an Internet access task force that focused on net neutrality and broadband competition.

Earlier in her career, Ms. Ohlhausen worked at the U.S. Court of Appeals for the D.C. Circuit as a law clerk for Judge David Santelle, and clerked for Judge Robert Yock of the U.S. Court of Federal Claims. Ms. Ohlhausen is a former adjunct law professor and a graduate of the George Mason University Law School. She received her bachelor’s degree from the University of Virginia.

If confirmed by the Senate, Ms. Ohlhausen will replace Republican William Kovacic, whose term expires in September. She would serve a seven-year term on the Commission’s five member board.
 

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On July 14, 2011, a joint House Energy and Commerce Subcommittee hearing focused on online privacy policy and perspectives of the ‘big three’ federal agencies with potential jurisdiction over online privacy – the Federal Trade Commission (FTC), the Federal Communications Commission (FCC), and the National Telecommunications and Information Administration (NTIA). The hearing, Internet Privacy: The Views of the FTC, the FCC, and NTIA, offered a comprehensive review of the state of online consumer privacy and the appropriate industry and government response to developments in online behavioral advertising and tracking. The hearing comes on the heels of a flurry of online privacy and data security legislation introduced in recent weeks and months. Witnesses included FCC Chairman Julius Genachowski, FTC Commissioner Edith Ramirez and NTIA Administrator Lawrence E. Strickling.

The hearing touched on issues including the economic impact of privacy regulation, defining the harms caused by data collection, agency jurisdiction and authority, protecting children, data security, and social networking. Click here for more detail regarding the major themes discussed at the hearing, which expanded the growing legislative record on online privacy and security.

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Most companies appreciate the importance of having a presence in the social media space, but not every company also appreciates the legal risks that can lurk there. As a result, many companies have run into problems and have been forced to defend their social media campaigns in public, in front of regulators, or in courts. All of this, however, can be mediated with a little knowledge and forethought.

Although each social media campaign should be evaluated individually, there are at least five legal considerations every company should note.  Read my article on Mashable to learn more.

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You’ve seen and heard the benefits of social media marketing campaigns. But are you adequately managing the legal risk?

In recent months, companies have found themselves in hot water over video contests, online content posted by consumers, and fake reviews on blogs. Understanding the FTC’s priorities and recent court decisions involving social media is important to ensuring compliance with applicable laws and avoiding liability.

Join Kelley Drye on August 9 from 12 noon - 1pm EST for a webinar about the important legal issues and best practices for leveraging social media. Topics of discussion will include:

• Common legal problems that companies have encountered by engaging consumers through social media including sweepstakes, contests, blogs, and other promotions.
• Objectionable content and how FTC guidance affects testimonial advertisements, bloggers, and celebrity endorsements.
• Intellectual property concerns, including copyright infringement and right of publicity.
• Practical tips to minimize legal liability associated with social media campaigns.

Kelley Drye Speakers:

David J. Ervin
Partner, Advertising and Marketing Practice

Gonzalo E. Mon
Partner, Advertising and Marketing Practice

Christopher M. Loeffler
Associate, Advertising and Marketing Practice

Email dcevents@kelleydrye.com to register.

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Recently, one of Twitter’s business partners announced that it had been contacted by the Federal Trade Commission (“FTC”) and planned to comply with the agency’s request for information. The company, UberMedia, develops software which helps users access and organize Twitter content through smart phones and desktop computers. While the FTC has not disclosed the scope of its inquiry, sources familiar with the investigation say that the FTC suspects Twitter of pressuring UberMedia and other partners which have developed features Twitter wants to offer itself, in a way that harms competition. Over time, Twitter has purchased some developers, and the company recently asked its existing developers to refrain from imitating Twitter’s own mobile device applications and web interface, in the interest of standardizing the user experience.

Although the nature of the investigation remains to be seen, marketers should be aware that a company’s business relationship with an app developer may not merely be a contract issue between the two parties; in some cases, it can give rise to concern from a regulatory agency about whether consumer choice is being impacted.

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Two attorneys from the Michigan-based 1-800-LAW-FIRM recently filed a class action lawsuit against Lady Gaga and her corporate partners in connection with the promotion and sale of wristbands to benefit victims of the March 2011 earthquake and tsunami in Japan.

“We Pray for Japan” wristbands are available for purchase for $5 through Lady Gaga’s official website, which represents that “all proceeds go directly to Japan relief efforts.” The plaintiff, on behalf of herself and all others who purchased a wristband, claims that the defendants retained a portion of the $5 donation; inflated reports of the total amount donated; imposed shipping charges in excess of the amount required to ship the items (and kept that excess amount for themselves); and wrongfully taxed the donations. Companies engaged in commercial co-ventures – the offering of a product for sale in connection with a donation to a charitable organization – and cause marketing campaigns should track the case and consider whether to make adjustments to their own campaigns.

Click here to read more about the allegations filed against Lady Gaga in this class action lawsuit.


 

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A plaintiff recently filed a class action lawsuit against Google and its subsidiary, Slide, alleging that the companies violated the Telephone Consumer Protection Act by sending text messages to consumers without their consent.

Google and Slide recently released Disco, a “group texting” service that allows consumers to send text messages to up to 99 people at the same time. Message recipients can also respond via text to all members of the group simultaneously by sending a single message. Messages can quickly accumulate, and the named plaintiff alleges he received more than 100 text messages in a single day. According to the complaint, members of a group do not provide consent to be part of the group or receive messages; instead, group members must opt-out if they want to stop receiving group messages.

As we’ve noted before, various courts have generally held that companies must obtain express consent before they can send text messages to consumers. In this case, the defendants are likely to argue that they did not send the messages themselves, but that argument has yet to be tested. Companies should check with their counsel before sending text messages or implementing any promotion that allows consumers to send text messages to determine what consents may be necessary.

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