JOMC 486 Final Exam Notes

JOMC 486 Final Exam Notes Transformative-Use Test -When a work contains significant transformative elements it is worthy of First Amendment protection and is less likely to interfere with the interests protected by right of publicity -Determining whether a work is transformative involves examining five factors No-Real-Relationship Test -Central question is whether the use of the celebrity's persona is artistically relevant to the defendant's work -If so, the use is protected, so long as the use does not explicitly mislead the audience about the plaintiff's role in the defendant's work Lanham Act Claims -Federal law allows suits over false or misleading representations likely to cause confusion or mistake as to a person's "affiliation, connection, or association" with another's "goods, services, or commercial activities" -Celebrities who sue for violation of their right of publicity often also sue under the Lanham Act Liability for Emotional and Physical Harm -One is liable for damages for emotional and bodily harm by extreme and outrageous conduct or intentionally or recklessly causes severe emotional distress to another Public Figure Plaintiff -Where the plaintiff is a public figure and they sue for intentional infliction of emotional distress, the plaintiff must also prove that the publication was made with actual malice (meaning the knowledge that it was false or with reckless disregard of whether it was false) Injurious Falsehood -Publisher of a false and disparaging statement that harms the interests of another is liable for any resulting pecuniary loss if the publisher intended to harm the other's interest, or recognized or should have recognized that is was likely to do so, and knew that the statement was false or acted in reckless disregard of its truth and falsity Slander of Title -A publication that disparages another's property right in land, chattels, or intangible property Trade Libel -A publication that disparages the quality of a person's goods, services, or property Disparagement -A statement that is understood to cast doubt upon the quality of another's land, products, or services and the publisher intends the statement to cast doubt or the recipient's understanding of it as casting the doubt was reasonable Pecuniary Loss -Restricted to direct and immediate loss caused by the conduct of potential consumers and the expense of counteracting the disparagement -Proof of conduct of specific persons or proof that the loss resulted from the conduct of many persons, none of whom could be identified -Where loss is shown by the conduct of many, the plaintiff must show the disparaging statement was widely disseminated, the level of business prior to the publication had been steady or increasing, there was a sudden decline in business, and other possible causes can be eliminated -Proving these elements establishes a presumption of causation Disparagement and Defamation -Defamation involved person reputation -Disparagement involves a person's property or economic interests -Statements may be both disparaging and defamatory -To be defamatory, a disparaging statement must allege dishonesty, deception, or other misconduct -Criticism of a product alone does not defame the producer -The plaintiff must prove special damages in all cases -The plaintiff must prove more than negligence: either knowledge of falsity or reckless disregard or ill will (intent to harm) -Publication of trade libel may be enjoined Competitor's Privilege -A person may make an unduly favorable comparison of the quality of his own goods or services with those of a competitor -A person need not believe that his own things are superior to those of the competitor -The comparison may not contain false facts regarding the rival's goods or services Puffery -Hyperbolic boasting or bluster no reasonable consumer would believe true or claims of superiority over a competitor's product that consumers understand are not to be taken literally Veggie Libel Laws -Impetus for these laws was an unsuccessful disparagement suit against "60 Minutes" in 1989 -13 states have such laws -Have been introduced in NE legislature but never passed -Cover perishable food products -Allow suits by any producer of the disparaged product -Some require defendants to prove truth -Some require criticism to be based on reliable scientific evidence -Some don't require common-law or actual malice -Some allow triple damages Lanham Act -Imposes civil liability on anyone who, in connection with goods and services, causes confusion as to any person's association or approval of such goods (used in right-of-publicity cases) or misrepresents the nature, characteristics, qualities, or geographic origins of one's own or another's goods, services, or commercial activities (used in false advertising cases) -Elements of action: -False or misleading statement about defendant's product or another's -Actual deception or a tendency to deceive the intended audience -Statement is disseminated to general public -Statement is commercial speech -Deception is material -Goods or services traveled in interstate commerce -A likelihood of injury to the plaintiff Deception by Mock-ups -A mock-up in advertising is deceptive if it seems to present evidence, including a test or demonstration that purports to prove a fact or product feature that is material to induce consumers to buy the product, but which does not actually prove such fact or product feature Three Kinds of Mock-Ups -Mock-ups suggests product has a quality it does not in fact possess -Mock-up offered as proof of a product claim but does not actually prove the claim -Mock-up substitutes for real product without calling attention to itself FTC -Composed of 5 members that make policy/final decisions -They are nominated by the president and confirmed by the Senate -No more than 3 of the FTC members can be of the same political party -How the FTC Acts: -Rule Making -Resembles what Congress does -General -Concerns future conduct -Adjudication -Resembles what courts do -Particular -Concerns past conduct Rulemaking vs. Adjudication -The lines between adjudication and rule making are blurred -Some rules may be of such limited applicability as to amount to adjudicative orders -Some adjudicative proceedings produce decisions of general applicability FTC Policy on Deceptive Advertising -A deceptive act or practice must be likely to mislead consumers (don't have to have evidence of actual deception) -Who are acting reasonably in the circumstances (what a typical member of a demographic thinks and how they interpret the ad) -And who the ad targets -The act or practice must be material (warranty/safety going to be material in any instance) -Some cases where they want intrinsic evidence (i.e. surveys, studies etc..) use that 20% of consumers are taking away false or misleading implication, which is actionable as a deceptive ad Deception by Nondisclosure -Even if everything in the advertisement is literally true, the FTC may find it deceptive if the advertisement omits material information and by that omission creates a misleading impression Deception by Implication -FTC looks at both explicit claims and implicit claims -If an implied claim is false, FTC will consider the ad deceptive, even if all the explicit statements are literally true Substantiation -Advertisers must be prepared to substantiate claims (particularly to the efficacy of drugs) -Must have competent reliable scientific evidence -Amount and kind of evidence may depend on the claim and the product Guides Against Bait Advertising -Alluring but insincere offer to sell something the advertiser does not intend or want to sell in order to switch consumers from the advertised merchandise to some other (usually more expensive) product -All offers should be bona fide -No statement or illustration used with an offer should misrepresent it in a material way FTC Guide on Former-Price Comparisons -Former price should be one at which the product was openly and actively offered for sale -Former price should not be one that was used in the remote past FTC Guide on Retail-Price Comparisons -Advertiser should be sure the higher price is one at which substantial sales of the item are being made in the trade area -Comparison must be to goods of similar quality FTC Guide on List-Price Comparisons -List price must be one at which the articles are sold at the principle retail outlets in the trade area -FTC cautions that there is a general failure to observe list prices FTC Guide on Bargains Based on Purchase of Other Goods -These may be deceptive if the seller has raised the regular price or decreased the quality or quantity of the article being sold FTC Guide on Limited-Time Offers -Limited time must be limited (90 days at the most) -Sale prices should not be the perceptual price of the item General Endorsement Rules -Must reflect the honest opinions, findings, beliefs, experience of endorser -May not distort the endorser's opinion or experience -Endorsement may run only so long as the endorser holds the opinion -If the ad says the endorser uses the product, then the endorser must be a good faith user as long as the campaign runs -An endorsement need not be verbal -Showing someone using a product can constitute an endorsement -Showing Matthew McConaughey driving a Lincoln -Implied endorsements must follow same rules as explicit ones Consumer Endorsements -Considered representative of what consumers generally encounter with the product -Where the ad appears to use "actual consumers" it must really use actual consumers or disclose the fact that the persons are actors Expert or Celebrity Endorsers -Endorser's qualifications must in fact give the endorser expertise in that field -Endorsement must be supported by an actual exercise of the endorser's expertise -Evaluation must compare products, where comparison is stated or implied -Organizational endorsements must be based on a fair collective judgment -Audiences are presumed to understand such endorsers are paid but other connections between the endorser and the product that might materially affect the credibility of the endorsement must be disclosed -If the endorser is neither a celebrity nor an expert, payment must be disclosed Online Endorsements -FTC is applying endorsement rules to online materials -If a blogger endorses a product in exchange for money or other consideration, that must be disclosed -Rule applies to tweets, Facebook posts, and other social media Advertising Checklist -Identification of any claims -Support or substantiation for claims -Use of testimonials and endorsements -Use of another's intellectual property -Use of another's name, likeness, or personal characteristics -Use of money, flags, and emblems Central Hudson Test -Whether the commercial speech is truthful and for a lawful activity -Whether the asserted governmental interest for the regulation is substantial -Whether the regulation directly advances the government's interest -Whether the regulation is no more extensive than necessary Why regulate advertising? -Truth of commercial speech is more easily verified by the speaker -Commercial speech is hardier than noncommercial speech -Governmental authority to regulate commercial transactions justifies regulation of speech linked inextricably to those actions Constitutes Commercial Speech -Central Hudson definition: speech that does nothing more than proposes a commercial transaction -Bolger definition: Is the speech in the form of an ad? Does it refer to products or services in marketplace? Does speech result from speaker's economic interests? Corrective Advertising -FTC cease and desist orders usually demand that advertisers make affirmative disclosures of any information omitted from earlier advertising -Corrective advertising goes farther in directing the advertiser to dispel misconceptions created by past advertising Obscenity -Pornography: no legal significance, anything likely to be sexually arousing (least restrictive) -Child pornography: illegal, any material that shows children in a sexualized context -Indecency: applies only to broadcast speech