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Celebrity Endorsements – The Fame, Blame or Shame Game

In January, Ace Metrix released a report questioning the relative value of celebrity endorsements (“Celebrity Advertisements: Exposing A Myth Of Advertising Effectiveness“). Just last month, a new study, co-sponsored by Ketchum and conducted by the Nielsen Company and BlogHer, took a look at social media trends among women and found online women were almost twice as likely to be influenced to consider a product based on a blogger they follow, rather than a pitch from a celebrity (2011 Social Media Matters Study).

Most of us understand that a few seconds of exposure on Oprah can mean the top of the best seller list, but celebrity steps and mis-steps can often pose, shall we say, “challenges,” for a brand. Celebrities such as Tiger Woods, Charlie Sheen, Lindsay Lohan and a host of others have seen their ups and downs. Correspondingly, advertising-endorsement considerations when dealing with any celebrity can be a mixed bag, depending on timing, relevance, image and a host of other factors—many outside the sponsor’s control. Sometimes neutral and other times negative, these recent studies suggest there are fewer success stories than one might otherwise assume.

Does this mean the end of celebrity endorsements? Probably not. But it may mean advertisers and agencies will become more selective and objective in evaluating the cost of promotions involving celebrities. Someone suggested celebrities should be compensated based on the “performance” of the advertising. First of all, that’s nothing new. However, in case you are wondering—and to throw in a quick legal byte—if a celebrity has a financial interest in the outcome of advertising involving that celebrity, yes, Legal Bytes has already noted that the FTC has an “app”etite for that: FTC (Revised) Endorsement Guides Go Into Effect.

The Advertising Technology & Media law practice group at Rimon has lawyers with decades of experience in working with advertisers and agencies handling matters involving celebrity endorsements—the good, the bad and, sometimes, the ugly. Let us know if you need us. We are happy to help.

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British High Court is for the Birds? Actually, for Twitter!

Again in the category of "you can’t really make this up," yesterday the High Court in Britain ordered an injunction served through Twitter – the social networking site.

Donal Blaney, a lawyer, runs a blog called Blaney’s Blarney. Another account, named blaneysbarney, was impersonating Blaney, a politically conservative blogger. Inspired by a case in Australia, where Facebook was used to serve a court order, Blaney asked the court to allow him to serve the anonymous Twitter-user with a court order using the very social network the imposter was using – Twitter! As a practical matter, the court order will only actually be served (i.e., the writ received) when that account owner logs in and accesses his or her account on Twitter.

Since access to British courts appeared much more facile than heading to California in the hopes that a U.S. court will deal with the issue and with Twitter in the United States, he opted to petition the High Court in Britain to allow him to serve the order using Twitter. In the United Kingdom, the law permits an injunction to be delivered through electronic means (e.g., telecopy or even email), so in principle, no new law has actually been created, although this is certainly a novel twist to the existing law – especially since the identity of the imposter account owner was not known to Blaney.

The British High Court agreed, noting that issuing the writ using the Tweeting facility appeared to be the best way to get to the individual behind the anonymous tweeting. As has been noted in Legal Bytes previously, obtaining the identity of anonymous account holders on social media networks can be difficult, with favorable results far from a certainty in all jurisdiction and legal venues.

In the Australian case reported last year, which did not involve impersonation, a couple in Australia defaulted on their mortgage with MKM Capital, but were successfully able to avoid being served with papers in person. They ignored emails and never showed up in court. So, a Supreme Court judge in Australia’s Capital Territory agreed to let MKM Capital serve papers over the Internet. Facebook profiles (you know, those great facts and tidbits you share with everyone in your social media network and the public) had birth dates, email addresses and all the information necessary to satisfy the judge that they could indeed communicate and contact the defendants using Facebook.

Getting back to the recent UK order, online impersonation of sports figures and entertainment celebrities has become an increasing problem and nuisance on social media networks, and Twitter has even reacted to the problem by allowing celebrity "Tweeters" to have their authenticity certified with an icon (similar to a "seal") that is attached to their real profile pages.

The ability to serve legal papers and court orders using digital means through social media – imagine serving my avatar in a virtual world – may have wide-ranging implications for bringing legal actions against those who seek to use anonymity or pseudonymity to insulate themselves from detection when engaging in inappropriate or illegal activities. That said, if the actual account owner is anonymous, how will we know who they are even after they are "served," unless the host or ISP is somehow bound by the service of process.

Stay tuned. Social media is turning the legal world upside down, too . . . let us know if we can help keep you upright. Contact me if you have questions about this or any other matters.

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Court Orders Google to Turn Over Blogger Identity Information

Earlier this week, New York State Supreme Court Judge Joan Madden ordered Google to turn over account information about an anonymous blogger to model Liskula Cohen in order to enable her to pursue a claim of defamation. The blogger had used Google’s blogging service to create a blog entitled “Skanks in NYC,” and had posted pictures and references to the model that were anything but flattering, and which, she claimed, lost potential opportunities for her. When Ms. Cohen originally sought to find out who had posted the content, predictably Google resisted, maintaining that its privacy policy does not permit the disclosure of the blogger’s account information.

To put this in perspective, the protection of free speech—especially anonymous speech—is a concept in American jurisprudence and history that traces its roots to Thomas Payne’s pamphlet, Common Sense. First published in 1776, it anonymously challenged the authority of Great Britain in the New World and is widely regarded as the first work to openly ask for independence for the Colonies from Britain.

Since then, state courts have varied on just how wide those rights go and for what purposes protection is appropriate. Although I am hardly a First Amendment lawyer or a Constitutional scholar, the legal issue still seems simple. If the speaker—anonymous or not—is expressing ideas or an opinion or belief, he or she is more likely to enjoy protection. While there are limitations on freedom of expression (e.g., yelling “fire” in a crowded theater), political expression has typically enjoyed greater protection than “commercial” speech—one being fundamental to a society’s encouragement of the free flow of ideas, the other designed to promote a product, service or brand in a free market economy. On the other side of the spectrum and generally not protected, would be public expressions that are clearly and solely intended to hurt someone, where actual harm can be shown from intentional or malicious public expression or, as was determined by the New York court here, where an illegal act was or was likely to have been committed—in this case, defamation.

While it is difficult to pinpoint a single factor that will always favor protection, anonymity is a strong legal shield U.S. jurisprudence holds dear to protect individuals from the potential swords of those in power, or from anyone who might seek to stifle dissent or ideas that might be unpopular. For example, in 2005, a blogger who ranted against a politician, accusing him of “obvious mental deterioration,” was ultimately protected by the Delaware Supreme Court expressing concern over the potential “chilling effect” on anonymous speech. The blogger in this case was referring to a politician, and the court ruled that in order to justify revealing the identity of an anonymous blogger, the plaintiff must provide evidence sufficient to all the elements of the claim if the case were to go to trial. Because the court concluded no reasonable person would believe the blogger’s statements to be factual, no action for defamation could be sustained, and the court dismissed the case. You can read the Delaware Supreme Court’s decision in full right here, but clearly for bloggers, this represented a significant landmark and affirmation of the substantial protection afforded anonymous posting.

In a subsequent 2008 case, a Maryland Court of Appeals decision (Independent Newspapers, Inc. v. Zebulon J. Brodie) similarly concluded that anonymous posts should be protected, and set out an approach first detailed in a New Jersey case (Dendrite Int’l, Inc. v. John Doe No. 3) describing the steps judges should take in deciding whether to compel disclosure of anonymous online speakers in cases that come along in the future.

Unlike the previous cases, and potentially distinguishing this case, is the fact that the blogger here targeted Ms. Cohen intentionally, exclusively, and individually; and while the defendant argued the postings were just “trash talk” and only opinion, Judge Madden noted that if Ms. Cohen could prove the blogger’s statements were factually inaccurate, it would refute the argument that the posts were merely opinion and would support a legal claim of defamation.

As we have previously noted in Legal Bytes in articles describing the FTC’s efforts to regulate the blogosphere, and in presentations we have made, it is clear that online speech is coming under increased scrutiny, and that regulators and courts appear to nibbling away at the virtually complete immunity anonymous bloggers once seemed to enjoy, seeking to define the contours of what is or is not permissible conduct on the web. Does anyone remember the term “netiquette”?

For more information, or for assistance with issues like these or any social media, online, digital content, gaming or matters that meet at the crossroads of advertising, technology & media, look up Joseph I. Rosenbaum, send me an email, or contact the Rimon attorney with whom you regularly work. We are happy to help.

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Rights of Publicity – Wake Up and Smell the Coffee!

Did you ever have the experience of someone walking up to you and telling you that you look just like someone . . ? Most of us at one point or another have had that experience. Well, Russell Christoff was in a store in 2002, when someone came up to him and said he thought he looked just like an image he had seen on a jar of coffee. Perhaps he laughed at that moment, but about a month later, when Mr. Christoff actually saw the jar of Taster’s Choice instant coffee on a shelf – with his recognizable image on the label – he bought the jar of coffee, stopped laughing, and called his agent.

It seems Mr. Christoff, a former model, had posed for a photo shoot for Nestlé (owner of the Taster’s Choice brand) back in 1986 and was paid $250, with the understanding that if the company used his likeness in marketing, he would receive $2,000 in compensation. Thus begins the tale and trail of a legal battle that continues to this day. Mr. Christoff filed suit in 2003 alleging violation by Nestlé of his right of publicity. (California Civil Code § 3344 bars, among other things, unauthorized use of a person’s image for commercial purposes.) The statute allows for damages, punitive damages, the award of attorneys’ fees AND (unlike many other state statutes protecting rights of publicity), profits attributable to the unauthorized use.

As the action unfolded, Mr. Christoff discovered Nestlé’s had begun using his image in 1986. Not only had he never been paid the $2,000, but there was more as well. Much more. It appears that from 1997 to 2003, Nestlé had also used his image on eight different varieties of Taster’s Choice brand labels in 18 different countries, including in Israel, Japan, Kuwait, Mexico, South Korea and the United States. At the trial, a jury concluded that Mr. Christoff should have been paid $330,000 for the use of his likeness and was entitled to damages of more than $15 million! California’s right of publicity statute, as it relates to proof of a defendant’s profits, states that the plaintiff needs to “present proof only of the gross revenue attributable to such use,” (emphasis supplied) while the defendant must prove “deductible expenses.”

In this case, even though the jury determined that only 5 percent of the sales of Taster’s Choice over the period of 1997 – 2006 were attributable to the use of the image, a profitable product and extended use made the jury award substantial, to say the least. Now you would think that the jury verdict in 2005 might have put an end to it, but predictably, Nestlé appealed and the saga continues.

Based on Nestlé’s appeal, the appellate court reversed the jury’s verdict based on the fact that Mr. Christoff had not brought his lawsuit before the statute of limitations had expired; but just this past Monday (Aug. 17), the California Supreme Court ordered the case back down to the trial court to take another look. Why, you may ask? Because the Supreme Court wants the trial court to answer the following question: What’s the correct way to calculate the statute of limitations – start date/end date – in lawsuits involving rights of publicity and product labeling?

Since Mr. Christoff brought his lawsuit six years after Nestlé USA, Inc. began using his image (but less than a year after he discovered it), the original trial court instructed the jury to use a two-year statute of limitation, but to use the point at which Mr. Christoff knew, should have known, or could have reasonably suspected his image was being used on the label, as the starting point for calculating when the statute of limitation would bar his lawsuit. It seems the trial court determined that unlike offensive or defamatory remarks that would not be considered “published” over and over again, simply because they were repeated in 100,000 copies of the same book, the “Single Publication Rule” (Uniform Single Publication Act as codified in Civil Code section 3425.3) did not apply to cases involving the use of someone’s likeness or image. So here’s how the wrinkle unfolds . . .

Continue reading “Rights of Publicity – Wake Up and Smell the Coffee!”

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Endorsements & Testimonials – FTC Broom Proposes Some Sweeping Changes

The FTC is seeking comments to its proposed revisions to the Guides Concerning the Use of Endorsements and Testimonials in Advertising, last updated in 1980, and which define endorsements and testimonials: advertising messages reflecting opinions, beliefs, findings or experiences of someone other than the advertiser, and which consumers are likely to believe. The revisions propose changes to the way the FTC will interpret (and enforce) the Act:

Continue reading “Endorsements & Testimonials – FTC Broom Proposes Some Sweeping Changes”

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Some Like It Hot – But Others Do Not!

Last fall, a California court held that CMG, assignee of rights under Marilyn Monroe’s estate to exploit her image and likeness, had no rights because at the time of her death, there were no laws in either California or New York recognizing rights of publicity. Enter California’s legislature—amending its law to retroactively enact rights of publicity (See Legal Bytes, October 2007) to “remedy” this unfortunate state of affairs. Whoops. Not so fast. A judge in the U.S. District Court for the Central District of California has just ruled Marilyn Monroe was a New York resident at the time of her death in 1962, and pulled the plug on the recently amended California Right of Publicity law.

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‘You Know How to Whistle, Don’t You? Just Put Your Lips Together and Blow.’

If you don’t know who said that or in what motion picture, stop reading and go to the next article. California Governor Schwarzenegger has just signed a bill specifically aimed at altering the future results of fact patterns analogous to two recent court decisions relating to the licensing of publicity rights for deceased celebrities. The two cases—one in New York and the other in California—dealt with a challenge to the right to license the use of Marilyn Monroe’s name and likeness for commercial purposes. The rulings stated that because at the time of her death neither California nor New York had a law allowing publicity rights to survive the death of a celebrity, and because those rights were not specifically bequeathed by Marilyn Monroe, those rights could not be construed as part of the “rest, residue and remainder” of her estate, and consequently not be part of the rights available to her estate (or subsequent licensors like the plaintiffs in these cases).

The legislation just signed by Gov. Schwarzenegger makes retroactive to before Jan. 1, 1985, the right of a celebrity’s estate to construe publicity rights as part of a “rest, residue and remainder” as a bequest in a celebrity’s will. January 1, 1985 was the effective date of the current California law allowing publicity rights to survive the death of a celebrity. Unfortunately, New York still does not have a law allowing publicity rights to survive the death of the celebrity.

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Video Gaming–First Amendment Prevails

A California appellate court has held (Kirby v. Sega of America) that makers of video games have a First Amendment right to base game characters on real celebrities, as long as the characters have been transformed. The celebrity in this case, Lady Miss Kier, former lead singer for Deee-Lite, claimed a character (named “Ulala”) in the video game Space Channel 5, infringed her rights. Not so—at least not in this case. So what does “transformed” mean? For that, you have to call us (or read the case for yourself).

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Brands & Entertainment

Those name brands appearing in hit shows. Those logos on the motion picture screen. The characters at the breakfast table with a favorite cereal. The star driving around in a particular automobile. The airline shown flying the lead character off to an exotic destination. Reality? Coincidence? Hardly. They are the result of contracts between the entertainment company or producers and the advertisers, and they represent a growing and important trend in marketing to consumers, along with the Internet, as reaching market segments through traditional radio and television advertising becomes increasingly difficult in our on-demand, fast-forward world.

In some cases, such “branded” entertainment is subtle—inserting itself into a scene or a sequence quite seamlessly and, not necessarily inconsistent with, reality. In other cases—“Harold and Khumar Go to White Castle”—yes, this really was the name of a movie, as was “Akeelah and the Bee,” which Starbucks helped finance and promote. In case you didn’t know, the FCC (and the FTC) regulate advertising on television—the FCC’s regulations concerning disclosure arose primarily from the quiz show scandals in the 1950s. When does creative control over programming yield to paid sponsorship and financing dollars or Euros (or British Pound Sterling). At what point does a program or movie become an infomercial or advercast? Are there vulnerable groups (e.g., children) that might not distinguish so readily between advertising and programming and at what point is that deceptive? What does SAG say about their actors being de facto appearing to endorse a product or brand inserted into their scenes and programs? If an actress is under contract with a cosmetic brand exclusively and a movie scene requires her to use a different brand—actionable? When the trailer with that clip airs on broadcast television—problem? Witness the following quote from Jonathan Adelstein, FCC Commissioner: “Now, products have even seeped into plot lines. Soap operas have woven cosmetic lines into their tales of who-did-what-with-who, while “The Apprentice” sounds more and more like an hour-long infomercial for the latest corporate sponsors.”

Trademark issues, endorsement and competitive/ambush marketing issues, free speech, freedom of expression, adequacy of disclosures, misleading or deceptive advertising—the list of potential issues is growing as the balance between creative control and commercial reality infect the entertainment industry. At one extreme is the traditional product placement in which an advertiser pays a fee for the hopes that the scene with its product doesn’t get cut and wind up on the editing room floor. At the other extreme is a placement fee and promotional campaign that is so integrally tied with the plot and the program that the two are indistinguishable—think “The Apprentice” or “Home Makeover.”

The deals are becoming more complex, and more fraught with potential legal and regulatory issues, and the stakes are higher. Need help? Contact Doug Wood or me—we would be happy to help.