California Anti-Spam Law - Welcome, Plaintiffs’ Bar
September 23, 2003
California has just enacted a tough new anti-spam law. See these NY Times and CNET stories. The text of the new law is here. Effective January 1, 2004, the new law:
- bans essentially all unsolicited commercial email advertisements sent to or from California, except to people who (i) have provided “direct consent” to receiving ads from the advertiser, or (ii) have a pre-existing or current business relationship with the advertiser;
- requires commercial email ads sent to pre-existing or current relationships to include an “opt-out” capability, either by email or by toll-free number;
- imposes liquidated damages of $1,000 per email, up to $1 million per email campaign; and
- perhaps most significantly, allows recipients, ISPs, and the state attorney general to file lawsuits against spammers.
Boy, the plaintiffs’ lawyers must be salivating over this one.
If your company sends out email blasts from a California location, the new law will cramp your style severely. If your company isn’t in California, you may end up with a tough choice: Either figure out which addresses on your email lists are in California, or comply with the California rules for all your emailings.
Taco Bell Learns $42MM Lesson That Idea Sources Can Haunt You
September 15, 2003
The New York Lawyer reports that Taco Bell was hit with a $41.9 million jury verdict for allegedly stealing the idea for the talking-Chihuahua advertising campaign. Thanks to Martin Schwimmer’s Trademark Blog for the pointer to this story.
The Taco Bell case illustrates a harsh fact of life for established companies: If you enter into discussions to use a smaller company’s ideas or concepts, you’d better be really, really careful if you subsequently decide to go it alone — you may find it very difficult to convince a jury that you (re-)developed the ideas or concepts on your own.
For another example of how juries can react in situations like this, see Celeritas Technologies vs. Rockwell International. In that case, Rockwell had engaged in preliminary discussions with Celeritas about some ideas for improving wireless modems that Celeritas’s technology guy had developed. Rockwell decided to go it alone, and Celeritas sued. At trial, the jury simply did not believe that Rockwell had independently created the technology after its discussions with Celeritas. Nor did the jury believe that Celeritas’s technology could not be a trade secret because it was already in the public domain (although the appeals court later held that Celeritas’s patent was invalid because of a prior published article that described similar technology). In all, Rockwell was hit with a damages verdict totalling over $58 million. (Disclosure: I was one of the members of Rockwell’s trial team.)
Someone’s Parodying Your Slogan?
You May Just Have to Get Used to It
August 24, 2003
A Fox News Network business strategy backfired last week when Fox was literally laughed out of court. Fox News tried to stop Al Franken, the alleged comedian and satirist, from using its trademarked phrase “fair and balanced” in the subtitle of his new book. Fox News got something of a black eye in the press coverage of the case. And, in a classic illustration of the law of unintended — but surely not unforeseeable — consequences, Fox News did Franken a huge favor by generating priceless publicity for his book. All in all, Fox News doubtless would have been much better off gritting its collective teeth and keeping its mouth shut about Franken’s book.
Watch Out for State Spam Laws
August 21, 2003
There’s been a lot of debate lately about whether Congress should enact anti-spam legislation. No matter what side of the debate you’re on, if your company does email blasts, it’s important to remember that numerous states have anti-spam laws that conceivably might apply to your company.
See http://www.spamlaws.com/state/summary.html for what appears to be a useful summary of state laws and links to the text of the legislation; I don’t know how accurate or up-to-date it is. Other countries and the EU might also have anti-spam laws that could come into play.
Allegedly Out-of-Date Comparative
Advertising Triggers Lawsuit
August 14, 2003
Comparative advertising sometimes begets litigation. An advertiser can take some simple steps to discourage its targeted competitor from running to the courthouse.
Rigging a Promotion Costs Coca-Cola Big Bucks
and Triggers Grand-Jury Investigation
August 13, 2003
From the Career-Limiting Moves Department: Coke agrees to pay up to $21MM to Burger King for rigging results of market testing of Frozen Coke at BK restaurants. Wouldn’t you hate to be in the shoes of the marketing managers who did that . . . .