Can Lawyers Buy Keyword Ads On Each Others’ Names At Google? (Forbes Cross-Post)

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“Competitive keyword advertising” occurs when a company buys the trademarks of its competition as keywords for search engine marketing. In the 2000s, it was one of the most interesting and hotly-contested issues of Internet Law as trademark owners filed many lawsuits and sought legislative protection. In the last few years, however, the issue has mostly fizzled out. A major 2011 ruling in the Ninth Circuit Court of Appeals cleaned up many of the legal doctrines that trademark owners were relying upon, and the Tenth Circuit extended that approach in 2013 in a devastating trademark owner loss. Since the 2011 ruling, I am not aware of any trademark owner winning a competitive keyword advertising case in court, even in cases with plaintiff-favorable facts.

As the competitive keyword advertising legal battles wind down in other industries, the fight is still raging in the legal profession. That’s not particularly surprising. Bar associations have fought against lawyer advertising for decades, and lawyers–as late technological adopters–often fight battles over the last generation’s technology.

Indeed, many lawyers believe that competitive keyword advertising by lawyers is improper despite the fact that courts routinely green-light the practice. In 2012, North Carolina adopted an ethics rule saying that lawyers using competitive keyword advertising are violating their professional responsibility duties, and last year it publicly disciplined a lawyer for such advertising.

I’ve co-authored a short article, Regulation of Lawyers’ Use of Competitive Keyword Advertising, that examines competitive keyword advertising by lawyers. It shows how the law has become more tolerant of competitive keyword advertising, including trademark law, publicity rights law and the rules governing attorney advertising. The article concludes with a call-to-action to repeal the North Carolina legal ethics rule against competitive keyword advertising, the last remaining legal impediment to competitive keyword advertising by lawyers.

The article is forthcoming in the University of Illinois Law Review, but you can check it out now at SSRN. We can still make minor changes, so we’d welcome your feedback. The abstract:

Lawyers have enthusiastically embraced search engine advertisements triggered by consumers’ keywords, but the legal community remains sharply divided about the propriety of buying keyword ads triggered by the names of rival lawyers or law firms (“competitive keyword advertising”). This Essay surveys the regulation of competitive keyword advertising by lawyers and concludes that such practices are both beneficial for consumers and legitimate under existing U.S. law—except in North Carolina, which adopted an anachronistic and regressive ethics opinion that should be reconsidered.

Some of my other articles related to competitive keyword advertising:

* Deregulating Relevancy in Internet Trademark Law
* Brand Spillovers
* Online Word of Mouth and its Implications for Trademark Law
* A Coasean Analysis of Marketing

May 13th 2015 Marketing

6 Characteristics of Great Storymaking

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originally published in Ad Age – read the published version there and share away 

 

Six Characteristics of Great Storymaking

It’s easy to call storytelling a cliché, but how exactly can one move beyond it when storytelling is entrenched as the epitome of what defines great marketing?

In previous Ad Age columns and during the Ad Age Digital Conference this April, storymaking has kept coming up as a way to describe the shift away from the broadcast-era mentality of storytelling to a new approach where marketers build on stories that people share with each other. Yet storymaking needs to be dissected so that anyone can identify it, learn from it, and engage in it themselves.

At the Ad Age conference, I moderated a panel with some stellar storymakers in their own right: Visa’s chief brand and innovation marketing officer Chris Curtin; Burger King’s CMO Eric Hirschhorn; Fullscreen’s head of content Ashley Kaplan; and Adobe’s CMO Ann Lewnes. Some examples and insights they shared further illustrate the art. Here are six characteristics of great storymaking.

1. Participatory: One clear sign of a story that’s told versus one that’s created with its audience is that the audience must be able to add to the story in some way. Beautiful stories can be told in 30-second spots, but it’s impossible for a 30-second spot alone to be considered storymaking. Storymaking requires some effort from its audience.

2. Fan-inspired: Sometimes, marketers create new experiences that trigger storymaking, and there’s a place for that, especially when launching a new product. Yet marketers are often getting into storymaking precisely because they’re seeing what their fans are already talking about and sharing. Like any kind of socially-driven marketing, it’s advantageous to have an existing base of fans to draw from. Adobe’s Lewnes said, “Brand love leads to storymaking. Fans must be engaged and very attached to you; otherwise it is difficult to make stories.”

3. Decentralized: If all the stories are designed to live in a central hub that the brand or publisher owns, then it takes away from what people can do on their own channels. True storymaking taps into any channel people want to use, online and offline. Sometimes this involves working with content creators and influencers to reach consumers. Fullscreen did this by promoting the movie “Ouija” with a stunt where it made teenage internet celebrity Kian Lawley disappear. His multi-platform efforts to tap his fans to bring him back led to more than 7 million Twitter mentions about the movie. Fullscreen’s Kaplan said, “The creator is core to everything we do since they are the ones with the relationship with their audience.”

4. Unpredictable: Because storymaking shifts the focus from the brand’s story to people’s stories about the brand, it opens the door for others to take the idea in new directions. When Visa Checkout sponsored Odell Beckham Jr.’s successful attempt at setting the Guinness World Record for one-handed catches, it inspired others to try to break the record. Iowa Hawkeyes wide receiver Tevaun Smith seemed to do so (though it wasn’t certified by Guinness), generating a new wave of coverage for the stunt.

5. Reciprocal: If you want people to run with a brand’s stories, there has to be something in it for them. For Visa Checkout and Fullscreen’s “Ouija” campaign, the brands entertained and surprised people. Burger King listened to customers’ pleas and brought back chicken fries to its menu, and fans in turn spread their love of the product through chicken fry emojis that the brand created. In Adobe’s case, the marketer showcases its customers’ work in its marketing for Photoshop [see the video above], Creative Cloud, and other products, as almost all artists love getting more exposure for their work. The value exchange is usually clear in every great example of storymaking.

6. Authentic: The clearest sign of storymaking gone awry is that all the stories created are positive. If marketers embrace their lack of control over where stories go, it means some stories won’t be ones that any brand would tell. Yet as Hirschhorn noted, that’s less risky than covering one’s ears. He said, “I don’t think negative sentiment towards a brand is a terrible thing. Operating in a world where people have a positive opinion or negative opinion is a much richer territory than telling people to feel one way.”

May 12th 2015 Marketing

More Section 230 Cases Than I Can Handle!

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Photo credit: enameled house number two hundred and thirty // ShutterStock

Photo credit: enameled house number two hundred and thirty // ShutterStock

My cup runneth over with Section 230 cases! This long blog post catches up on a few from the past couple months. Warning: there are some stinkers in this batch.

Google, Inc. v. Hood, 2015 WL 1546160 (S.D. Miss. March 27, 2015)

As you know, for some time Mississippi Attorney General Jim Hood has been haranguing Google about third party content on Google’s network, which culminated with a 79 page subpoena from Hood’s office to Google apparently predicated on legal theories that bear no resemblance to the actual law. Google challenged this subpoena in court, and the resulting opinion contributes to the canon of First Amendment and Section 230 cases protecting search engines. Ironically, although it’s not exactly how he envisioned it, Jim Hood is helping make legal principles that benefit his constituents and is garnering big headlines along the way.

The Section 230 discussion is murky. The court cites Google’s self-policing efforts and the 2013 letter to Congress sent by the state attorneys general complaining about how Section 230 restricts their authority (that was in the context of their anti-online prostitution advertising efforts). But the court doesn’t clearly explain why these facts support the TRO.

The court’s First Amendment discussion is much clearer:

Google’s publishing of lawful content and editorial judgment as to its search results is constitutionally protected. See Jian Zhang v. Baidu.com Inc., No. 11 CIV. 3388 JMF, 2014 WL 1282730 (S.D.N.Y. Mar. 28, 2014)(“there is a strong argument to be made that the First Amendment fully immunizes search-engine results from most, if not all, kinds of civil liability and government regulation”)(citations omitted). The Attorney General’s interference with Google’s judgment, particularly in the form of threats of legal action and an unduly burdensome subpoena, then, would likely produce a chilling effect on Google’s protected speech, thereby violating Google’s First Amendment rights.

To me, this reasoning applies equally to a wide swath of state attorneys general enforcement actions against Internet companies.

The court continues:

it is well-settled that the Attorney General may not retaliate against Google for exercising its right to freedom of speech by prosecuting, threatening prosecution, and conducting bad-faith investigations against Google

Ouch! “BAD FAITH”!

Google also gets great rulings on the Fourth Amendment…

Attorney General Hood’s subpoena must comport with the requirements of the Fourth Amendment and not wage an unduly burdensome fishing expedition into Google’s operations.

…and FDCA preemption…

Google points out that the subpoena demands information concerned with Google’s dealings with Canadian online pharmacies in violation of federal law. This court, then, finds it necessary to temporarily enjoin Attorney General Hood’s enforcement of the subpoena until the court resolves the extent, if any, to which the demands contained therein are preempted [by the Food, Drug and Cosmetics Act].

…and copyright preemption:

The subpoena contains various requests for information regarding copyright infringement. Many of these requests are found in a section titled “Stolen Intellectual Property”. It is well-established that state attorneys lack the authority to enforce the Copyright Act; such enforcement power lies with the federal government.

The court also cites Section 512’s applicability, but like the Section 230 discussion, the court’s thought process is incomplete.

I hope Mississippi voters will keep this ruling in mind during the next election cycle. I’m struggling to see how Hood’s stated objectives advance his constituents’ interests at all, and I doubt even more how those objectives became a high enough priority to trump the many other important functions that state AGs should be performing. (Well, actually, from the Project Goliath emails, we all know that Hood has disquieting ties to the MPAA, but that also seems like helpful information for Mississippi voters to know.)

Faegin v. LivingSocial Inc., 2015 WL 1198654 (S.D. Cal. March 16, 2015):

This is a troubling ruling. The principal players are “A.T. Your Service Cleaning” and its rival “At Your Service Housekeeping.” The pseudo-trademark problems should be obvious: both parties adopted virtually identical but highly descriptive, if not generic, business names. There is a good chance these so-called trademarks won’t survive this litigation.

The A.T. enterprise ran LivingSocial promotions for a few months; then its rival ran LivingSocial promotions. The A.T. enterprise claimed that its rival failed to do a good job for its customers and didn’t provide its contact information prominently enough, and the resulting consumer frustration and confusion led to unwarranted bad consumer reviews and hurt the A.T. enterprise’s business.

The A.T. enterprise also sued LivingSocial for running the bad ad promotion for the rival. LivingSocial sought to dismiss the claims on Section 230 and other grounds. LivingSocial points out that the A.T. enterprise’s real beef is with the rival’s business name, and the business names are third party content to LivingSocial. However, the complaint repeatedly alleged that LivingSocial “partnered” with the rival, so the court concludes that it can’t dismiss on Section 230 grounds:

The FAC alleges that Defendant LivingSocial advertises and sells the allegedly misleading vouchers. From this allegation, the Court is able to draw the “reasonable inference” that Defendant LivingSocial was “‘responsible, in whole or in part’ for creating or developing” the content made available on LivingSocial’s website.

It’s really hard to figure out what to make of this conclusion. One argument is that LivingSocial is basically an ad network, in which case it should easily qualify for Section 230 for third party ads. But we’ve also seen some troubling Section 230 rulings for ad networks, including the Swift v. Zynga and Chang v. Wozo rulings (both involving AdKnowledge) as well as the LeanSpa ruling discussed below. So one possibility is that courts are choking on Section 230 for ad networks, at least at early stages of the litigation.

Another way of reading the ruling is that LivingSocial was the retailer in this equation, so it faces first-party liability for the goods and services it sells even if those are ultimately fulfilled with third party vendors. That interpretation would comport with cases like the uncited FTC v. AccuSearch case, but it doesn’t resolve how this case differs from the many Section 230 wins by eBay and Amazon for their marketplaces.

The opinion goes on to talk about the 1114(2)(B) trademark safe harbor for innocent printers and publishers. We rarely see interpretations of that statute, but sadly, the 1114 discussion is as cryptic as the Section 230 discussion. The court says:

The allegations of the FAC do not demonstrate that Defendant LivingSocial is entitled to protection under the Lanham Act’s safe harbor provision as an innocent infringer[]” or “innocent violator[].” 15 U.S.C. § 1114(2)(B). The FAC alleges that Defendant LivingSocial was aware of A.T. Your Service Cleaning and Janitorial’s mark from their prior partnership and then advertised with At Your Service Housekeeping in the same market.

I continue to believe that Section 1114 safe harbor is an important component of online intermediary liability scheme, but this ruling doesn’t support that hypothesis.

FTC v. LeanSpa, 2015 WL 1004240 (D. Conn. March 5, 2015).

This case has been troubling me ever since I first blogged it 2 years ago. I wrote last time that the ruling sucked, and that’s how I feel about the latest opinion too.

The case relates to the numerous fake news websites created to promote the health benefits of acai berries. Some of those sites participated in an affiliate network run by LeadClick for the benefit of the advertiser, LeanSpa. Let’s assume for now that both LeanSpa and the creators of fake news sites violated FTC law. What about the liability of the advertising network in the middle, LeadClick?

On the surface, this sounds like an easy Section 230 win. Any problems with the content of either LeanSpa or the fake news website creators would necessarily hold LeadClick responsible for third party content. Yet, the court sides with the FTC in this case. How?

The court starts with the prima facie case of a Section 5 violation. LeadClick is held to the following legal standard:

Courts have held individual defendants liable for a corporation’s conduct where they “(1) participated in the acts or had authority to control the corporate defendant and (2) knew of the acts or practices.”

This is a contributory copyright-esque standard: knowledge + control/participation. LeadClick met this standard with respect to the fake news site operators.

Knowledge: “it is undisputed that LeadClick employees knew that fake news sites were being used to promote LeanSpa products on the eAdvertising Network.” Notice the narrow view of scienter in the test: it doesn’t require knowledge of any legal violation. And of course every ad network will generally know what types of content its network publishers are providing.

Control: the court says (cites omitted):

no reasonable jury could deny that LeadClick both participated in, and had the authority to control, the affiliate marketers conduct in so far as it related to the fake news sites. Specifically, LeadClick’s affiliate managers were tasked with scouting for new affiliates. Affiliate managers “routinely gathered information about affiliates,” and they would solicit affiliates to join eAdvertising. Thus, LeadClick solicited and hired affiliate marketers using fake news sites to advertise LeanSpa’s products. Notably, “[a]ffiliate marketers had to apply to join the eAdvertising Network, and LeadClick would decide which to accept.” Indeed, “the standard contract that governed LeadClick’s relationship with its affiliates” states:

All websites, newsletters, companies, or individuals need official approval from eAdvertising before they can become a member of the Publisher Program. Only websites and newsletter that have been reviewed and approved are permitted to use the programs. eAdvertising reserves the
right to withhold or refuse approval on any website, newsletter, company, or individual for any reason, whatsoever.

Although LeadClick asserts that, “in practice, affiliate marketers were not required to submit their ‘websites’ for approval unless [it] specifically requested to see the page,” it does not deny that it had the authority to review pages. Indeed, after the FTC began suing affiliate marketers in April 2011 for using fake news sites, LeadClick started to screen fake news pages by removing their ability to advertise certain products without approval from the merchant. This evidence establishes that, as a matter of law, LeadClick had the authority to control the affiliate marketers’ use of fake news pages…

LeadClick had the authority to not hire affiliates using fake news sites, to instruct them not to use such sites after hiring them, and to remove them if they continued to do so. Just as LeanSpa would be liable for approving requests to advertise with fake news sites, LeadClick, as LeanSpa’s agent, is liable for its own decision to effectuate that decision.

In other words, LeadClick ran an advertising network. Ad networks have to police their network; it’s not only required by their advertisers, but increasingly thhey are under legal compulsion to do so (see, e.g., copyright, CA’s law on advertising to minors). Thus, the court’s analysis should equally apply to any other ad network.

The court continues that LeadClick participated in the deception based on the following evidence (cites omitted):

LeadClick purchased advertising space on genuine news sites and sold it to affiliates advertising with fake news sites. In doing so, it provided a way for consumers to browse directly from a genuine news site to a fake one. Indeed, it is clear that LeadClick knew it was creating such a bridge between genuine and fake news sites because, on some occasions, LeadClick would identify fake news pages “as destination pages for the banner ads when negotiating with media sellers,” and sometimes it “identified the destination webpage for the banner ads by emailing the media seller a compressed version of the affiliate’s” fake news page.

LeadClick also discussed product pairings that appeared on the fake news sites. Specifically, the fake news pages contained a purported reporter’s test of a two-step product combination. LeadClick participated in the fake news sites’ deception by, for example, “implementing a rule that publishers pair . . . [LeanSpa] products with other [LeanSpa] products” and going “through all the publishers that [were] running [a LeanSpa] offer and then tell[ing] them that they needed to run the new step 2.”

I don’t fully understand these points. To me, it sounds like what ad networks do.

Having established LeadClick’s prima facie violation, the court then turns to the Section 230 defense (cites omitted):

No reasonable jury could deny that LeadClick was an “information content provider.” LeadClick solicited and hired the affiliate marketers to advertise LeanSpa’s products, knowing that affiliates used fake news pages. LeadClick continued paying Davidson and other affiliates running fake news pages for their referrals to LeanSpa’s website. LeadClick communicated with LeanSpa and with affiliates running fake news pages regarding which products should be advertised as the “Step 1” and “Step 2” products purportedly under independent investigation. LeadClick also screened advertisements according to merchants’ preferences.

LeadClick’s media buying also materially contributed to the unlawful nature of the fake news sites by providing affiliates running fake news sites with a way to direct consumers from genuine news sites to fake news sites. The alleged deception in this case is the representation that independent testing was being conducted by genuine news reporters; LeadClick’s media buying contributed to that deception by providing consumers with yet another reason to think that the news site was genuine.

I don’t even know what to say about this. The “analysis” apparently conflates the prima facie elements with the immunity defense. Plus, the court compounds the Section 230 problem by holding the ad network accountable for the content on the legit new sites in addition to the fake news sites.

Unquestionably, fake news sites are bad news. No judge is going to be sympathetic to them. Ad networks shouldn’t be doing business with fake news sites. But this ruling goes way too far in bending both the prima facie case and Section 230 to tag the intermediary. In light of the other bad ad network rulings, we seem to be moving towards a SOPA-esque world where every ad network is fully responsible for the content on network publishers’ sites, meaning they will dump any publisher than poses any legal risk to them.

A final stinger: the court holds CoreMetrics, LeadClick’s parent, accountable as a relief defendant for another $4M of damages.

Opperman v. Path, 2015 WL 1306494 (N.D. Cal. March 23, 2015)

Jones, the one new case cited by Apple, does not change the Court’s conclusion that Apple is an “information content provider.” The Jones court merely adopted the Ninth Circuit’s reasoning in Roommates.com, 521 F.3d 1157 at 1168, that, if the alleged content provider is not a creator of the challenged content, it must have done more than merely “encourage” the creation of the challenged conduct; the alleged provider must have required another to create that content. ECF No. 501 at 26-27 (quoting Jones, 755 F.3d at 414). The Court previously considered this portion of Roommates, and determined that Plaintiffs’ allegations were sufficient at this stage to survive a CDA challenge.

Here, Plaintiffs allege that Apple effectively was a creator, at least in part, of the App Defendants’ Apps that misappropriated Plaintiffs’ address book data. ECF No. 478, ¶ 46 (“all iDevice Apps were built, in part, by Apple.”). Plaintiffs have also provided factual detail regarding how Apple controlled the development of Apps provided by its App Store, and contributed to the creation of the offensive content, for example, by using its iOS Human Interface Guidelines to instruct App developers to access address book data without prior permission. This is all the information-content-provider exemption requires: “The term ‘information content provider’ means any person or entity that is responsible, in whole or in part, for the creation or development” of the offending content. Neither Jones nor the new allegations in the SCAC compel the Court to reverse its prior conclusion.

Apple, as an alleged “information content provider” under the CDA, is not entitled, as a matter of law and at this stage of the proceedings, to blanket CDA immunity for the conduct challenged here.

Kabbaj v. Google Inc., 2015 WL 534864 (3d Cir. Feb. 10, 2015)

Kabbaj filed a complaint in the District Court against Google, Inc., Amazon, Inc., Yahoo, Inc., and ten “John Doe” defendants, charging defamation, tortious interference with contract, and negligent and intentional infliction of emotional distress based on various online postings. The District Court, in a comprehensive opinion, properly held that Kabbaj’s claims against Google, Amazon, and Yahoo are barred by the Communications Decency Act, 47 U.S.C. § 230(c)(1), (e)(3). See Green v. America Online (AOL), 318 F.3d 465, 470–71 (3d Cir.2003) (Act provides immunity to interactive computer service providers “as a publisher or speaker of information originating from another information content provider”).

Prior blog post.

Westlake Legal Group v. Yelp, 14-1872 (4th Circuit March 18, 2015)

the facts alleged in the complaint and attached exhibits indicate, at most, that Yelp has an automated system that filters reviews. Such activities constitute traditional editorial functions that do not render Yelp an information content provider.

Tobinick v. Novella, 2015 WL 1191267 (S.D. Fla. March 16, 2015):

Upon a careful review of the briefing, the exhibits, and the record as a whole, the Court concludes that whether or not the Society is responsible for the content of the articles, neither article constitutes commercial speech, at least as regards the Society.

That disputed fact is material with respect to the Society’s argument that they are entitled to CDA immunity on Plaintiffs’ defamation claims. For CDA immunity to apply, the Society must be a “provider or user of an interactive computer service.” Whitney Info. Network, Inc. v. Xcentric Ventures, LLC, No. 204–CV–47–FTM–34SPC, 2008 WL 450095, at *7 (M.D.Fla. Feb. 15, 2008). Because the relationship between the Society and the SBM Blog remains in dispute, the Court cannot ascertain whether the Society is such a provider with respect to the SBM Blog.

Followup ruling from April denying the request for a preliminary injunction.

Nestle Purina PetCare Co. v. Blue Buffalo Co. Ltd., 2015 WL 1782661 (E.D. Mo. April 20, 2015):

PRCG/Haggerty briefly argues that it is immune from liability under the Communication Decency Act (“CDA”), 47 U.S.C. § 230 et seq., because Congress “made the legislative judgment to effectively immunize providers of interactive computer services from liability in tort with respect to material disseminated by them but created by others.” See Blumenthal v. Drudge, 992 F.Supp. 44, 49 (D.D.C.1998). PRCG/Haggerty argues that under the CDA, it cannot be liable for the content Purina or anyone else provided for the website. Blue Buffalo responds that PRCG/Haggerty’s argument fails because (1) CDA immunity is an affirmative defense that a plaintiff is not required to plead around, and (2) PRCG/Haggerty is an “information content provider” and accountable under the CDA for the content it created for the Honesty website.

Under the CDA, “the term ‘information content provider’ means any person or entity that is responsible, in whole or in part, for the creation or development of information provided through the Internet or any other interactive computer service.” 47 U.S.C. § 230(f)(3). The CDA does not protect internet “content providers” from responsibility for the content they transmit through the web. See, e.g., Hy Cite Corp. v. Badbusinessbureau.com, 418 F.Supp.2d 1142, 1146, 1148–49 (D.Ariz.2005) (allegations that defendant produced original content and editorials and created titles to the defamatory reports posted by users of the website were sufficient to survive motion to dismiss). Blue Buffalo is correct that it is not required to plead around affirmative defenses, and PRCG/Haggerty’s defense of immunity is such an affirmative defense. See, e.g., Doe v. GTE Corp., 347 F.3d 655, 657 (7th Cir.2003). Furthermore, even if Blue Buffalo were required to plead around this defense, it has sufficiently alleged that PRCG/Haggerty “designed and built” the advertising campaign challenged in the SAC.

April 26th 2015 Marketing

Mixed Ruling in Competitive Keyword Advertising Case–Goldline v. Regal

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Photo Credit: In the Garbage Can // ShutterStock

Photo Credit: In the Garbage Can // ShutterStock

The lawsuit’s principal participants are rivals in the precious metals and coin industry. The defendant organization, Regal, has an affiliate program, and it appears that some affiliates bought competitive keyword advertising using the plaintiff Goldline’s trademark. The ruling is on Regal’s motion to dismiss, and the judge’s overly pithy opinion raises as many questions as it answers. The court based its ruling on the following facts alleged in the complaint:

According to Plaintiff, Defendants purchase advertising keywords that include the GOLDLINE Marks so their websites will appear when search terms intended for Plaintiff are entered in the search engine. Many of the search results are not identified as ads. The purpose of the affiliates’ websites is to divert customers away from Plaintiff and other competitors, toward Regal. To that end, Regal prepares for its affiliates’ use, scripts and website materials that purportedly offer objective, independent evaluations and facts related to precious metal dealers. These
materials allegedly infringe on the GOLDLINE Marks. The materials also allegedly offer endorsements for Regal; false information and
statements about the independent and unbiased views of the reviewer; and false and disparaging information about Plaintiff, including customer complaints, pending litigation, and poor consumer and industry ratings.

The court dismisses the Lanham Act trademark and false designation of origin claims:

While the allegations and attached exhibits indicate that Defendants use Plaintiff’s marks, there is simply nothing stated, that if deemed true, constitute commercial use that would likely cause confusion as to the origin or affiliation of Regal’s products or services. In fact, the allegations either state directly, or create a strong inference, that the purpose of Defendants’ use of the marks is to disparage Plaintiff and endorse Regal. Taken as true, such conduct would seemingly distinguish Regal’s products from Plaintiff’s, as opposed to causing customers confusion as to the origins of the two products.

For this reason, I’m counting this case as yet another win where defendants defeated a trademark claim over competitive keyword advertising–a streak of defense wins that I think goes back to 2011. The court sidesteps the advertiser-affiliate interplay, so unfortunately we don’t get any insights into that issue.

Despite this good news, the court says a number of other claims survive the motion to dismiss, including:

* false advertising and unfair competition
* RICO/civil conspiracy
* defamation

Given the court’s inscrutable opinion, however, it’s unclear which (if any) of these claims survive solely due to the competitive keyword advertising aspect of the plaintiff’s allegations. At minimum, the defamation claim appears fairly clearly to be based on ad copy. Still, I imagine trademark plaintiffs suing over competitive keyword advertising will think about whether these alternative claims (including normally junky claims like RICO and civil conspiracy) might be worth a stab.

Case citation: Goldline, LLC v. Regal Assets, LLC, CV 14-03680 DDP (ASx) (C.D. Cal. April 21, 2015)

Some Related Posts on Keyword Advertising

* Another Competitive Keyword Advertising Lawsuit Fails–Infogroup v. DatabaseLLC

* Damages from Competitive Keyword Advertising Are “Vanishingly Small”

* More Defendants Win Keyword Advertising Lawsuits

* Another Keyword Advertising Lawsuit Fails Badly

* Duplicitous Competitive Keyword Advertising Lawsuits–Fareportal v. LBF (& Vice-Versa)

* Trademark Owners Just Can’t Win Keyword Advertising Cases–EarthCam v. OxBlue

* Want To Know Amazon’s Confidential Settlement Terms For A Keyword Advertising Lawsuit? Merry Christmas!

* Florida Allows Competitive Keyword Advertising By Lawyers

* Another Keyword Advertising Lawsuit Unceremoniously Dismissed–Infostream v. Avid

* Another Keyword Advertising Lawsuit Fails–Allied Interstate v. Kimmel & Silverman

* More Evidence That Competitive Keyword Advertising Benefits Trademark Owners

* Suing Over Keyword Advertising Is A Bad Business Decision For Trademark Owners

* Florida Proposes to Ban Competitive Keyword Advertising by Lawyers

* More Confirmation That Google Has Won the AdWords Trademark Battles Worldwide

* Google’s Search Suggestions Don’t Violate Wisconsin Publicity Rights Law

* Amazon’s Merchandising of Its Search Results Doesn’t Violate Trademark Law

* Buying Keyword Ads on People’s Names Doesn’t Violate Their Publicity Rights

* With Its Australian Court Victory, Google Moves Closer to Legitimizing Keyword Advertising Globally

* Yet Another Ruling That Competitive Keyword Ad Lawsuits Are Stupid–Louisiana Pacific v. James Hardie

* Another Google AdWords Advertiser Defeats Trademark Infringement Lawsuit

* With Rosetta Stone Settlement, Google Gets Closer to Legitimizing Billions of AdWords Revenue

* Google Defeats Trademark Challenge to Its AdWords Service

* Newly Released Consumer Survey Indicates that Legal Concerns About Competitive Keyword Advertising Are Overblown

April 24th 2015 Marketing

Q4 2014 & Q1 2015 Quick Links Part 5 (Trademarks, Domain Names, Marketing)

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Photo credit: 3D Quick Link Crossword // ShutterStock

Photo credit: 3D Quick Link Crossword // ShutterStock

Trademarks and Domain Names

* TheDomains: .Sucks Releases Pricing With “Premiums” For Trademark Holders Up To $2,499 A Year. A pox on the .sucks operator and on ICANN for permitting this pricing scheme. ICANN wants federal regulators to declare the pricing scheme illegal so that it can take action against the operator, but if it doesn’t get bailed out by these government enforcers, it won’t do anything.

* The most significant keyword advertising loss in Europe, Interflora v Marks & Spencer, was overturned and ordered for a retrial.

* Treemo, Inc. v. Flipboard, Inc., 2014 WL 5306671 (W.D. Wash. Oct. 15, 2014):

Flipboard does not argue that the Google search results would cause initial interest confusion, i.e., a “bait and switch” for Flipboard’s potential customers. In fact, the Google search results suggest that potential Flowboard customers would instead be redirected by Google to Flipboard’s site. Nevertheless, the Google search results continue to link Flowboard with Flipboard, fostering consumer confusion about the difference between the two apps, and showing that the two apps operate within the same space.

Related article on how search engines create meaning in trademark law.

* Rebecca: Trademark overreach of the day: ICE says “Yankees Suck” infringes

* And now something ridiculous from North Carolina: David J. Turlington III of Boone was censured by the Grievance Committee. Turlington employed other attorneys’ names and names of law firms in a keyword advertising campaign through Google’s AdWords program. He continued this practice after publication of 2010 FEO 14, which states that an attorney’s purchase or use of another attorney’s name in an Internet search engine’s keyword advertising program is dishonest. The committee also found Turlington knowingly made a false statement of material fact by claiming the inclusion of inappropriate keywords was inadvertent. Prior blog post. More on this issue very soon. [UPDATE: here’s a preview.]

* NY Times: The Weird Science of Naming New Products

* From ICANN: ccTLDs aren’t subject to writs of attachment.

* Couture v. Playdom (Fed. Cir. March 2, 2015): offering a service, without the actual provision of a service, is not sufficient to constitute use in commerce under the Lanham Act. In that case, an “under construction” web page didn’t count.

* First Premier Bank v. Papadimitriou (D. S.D. Jan. 7, 2015). Credit card company can’t use trademark law to shut down a credit card comparison site from displaying an “apply now” button.

* World Trademark Review: EweTube? YewTube? Study uncovers extent of sound-based cybersquatting

* Marketing Land: Verisign: .Com Domains Have More Click Appeal In Search Results

* Lexology: use of a competitor’s trade marks in metatags held not to amount to copyright or trade mark infringement in Canada

* I totally missed this, and maybe you did too: NTIA suspended kids.us in July 2012 because “the kids.us domain is not serving its intended purpose.” No shit!

* Chronicle of Higher Education, Here Are 88 Weird College-Owned Trademarks, Arranged as a Poem

Advertising

* The State Bar of California Standing Committee on Professional Responsibility and Conduct, Formal Opinion Interim No. 12-0006: “ISSUES: Under what circumstances is “blogging” by an attorney subject to the requirements and restrictions of the Rules of Professional Conduct and related provisions of the State Bar Act regulating attorney advertising?”

* WaPo: How two ‘free’ games made enough money to buy Super Bowl ads

* Marketing Land: What 30 Seconds Of Super Bowl Ad Money Would Have Bought Online: 2,542,573,344 Impressions

* Newsweek: Manipulating Wikipedia to Promote a Bogus Business School. Related article.

* NY Times: Radio Broadcasters Seek Changes in Disclosure Rules for Paid Programming. Related article.

* NY Times: Unilever, Suing Over Rival’s Use of ‘Mayo,’ Changes Own Website. The NY Times followup: Hellman’s Maker Unilever Drops Suit Over Eggless Mayo

* Business Insider: British regulators are targeting freebies to vloggers. And AdWeek: Inside Instagram’s Secret Barter Economy. NY Times. My blog post on Instagram freebies.

* The Americanization of Cuba continues: the government is officially creating classified ads. Related blog post.

* Reuters: Online ad revenue at risk in war on ‘click fraud’

* Fox Test Prep v. Facebook, Inc., 2014 WL 7336402 (9th Cir. Dec. 26, 2014):

Plaintiffs’ central theory of liability is that Facebook improperly charged them for “invalid” clicks. As a result, it was crucial for them to establish a workable, classwide method to distinguish among “valid,” “invalid,” and “fraudulent” clicks. Plaintiffs’ expert stated that he could develop and implement rule-based algorithms to determine whether Facebook failed to employ algorithms in conformity with prevailing industry standards in determining whether a click is legitimate. He further noted that the IAB (Interactive Advertising Bureau) Click Measurement Guidelines make clear that it is generally understood in the industry that a click is defined as a request by a human with an intent to view the content. Nowhere in his report or deposition, however, did he provide the actual method for distinguishing between valid and invalid clicks. Further, in his deposition he acknowledged that he knows of no sources, including the IAB guidelines, that provide specific parameters for determining what constitutes a valid click.

Because Plaintiffs failed to meet their burden of demonstrating a workable class-wide methodology to determine what constitutes a “valid click,” the district court did not abuse its discretion in denying class certification because “common issues do not predominate,” In re Facebook, 282 F.R.D. at 459, as required by Rule 23(b)(3).

* Globe and Mail: The hidden cost of annoying ads is fewer page views

* AP: As tastes change, big food makers try hipster guises

* FTC Business Center Blog: Top 10 Blog Posts of 2014

* Santa Monica City Attorney’s office busts MyLife.com for false advertising related to automatic account renewals and more. A good reminder that Internet enforcement activity can take place even at the city level.

* TINA.org, Belting Out Brand Names

April 15th 2015 Marketing

The Myth and Magic of WD-40, the Cold War Lube That Changed America

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According to the most recent census, there are 115,227,000 households in America, and they don't have a lot in common. Only 33 percent have kids, 18 percent are millionaires, and 14 percent have trouble paying the grocery bill. But one characteristic ties much of America together in a way one would hardly expect: Some 80 percent of U.S. households have a can of WD-40 on the shelf.

In fact, there's probably no other brand in the hardware category that has so utterly transcended its origins. Not only does WD-40 generate $383 million in annual sales in the 176 countries in which it is sold, but it also boasts 2,000 documented applications and a fan club with more than 100,000 members.

Photo: Nick Ferarri

 

WD-40's place in the consumer culture owes to the fact that the stuff works, and works for all kinds of stuff. "We've heard many times, 'If WD-40 can't fix it, nothing will,'" said CEO Garry Ridge, adding that WD-40 is "an honest product. It makes heroes out of those who use it."

That is fitting, considering that WD-40 originated in the defense industry. In the early '50s, a three-person San Diego company called Rocket Chemical started work on a solvent for the burgeoning aerospace industry. Rocket was after a compound that would remove water (hence preventing rust) while also acting as a lubricant and degreasing agent. After trying out dozens of different formulas, Rocket settled on its 40th water-displacement mixture, and looked no further for a name: WD-40. Soon afterward, engineers for General Dynamics began using the solvent to protect various parts of its Atlas missiles—America's first nuclear ICBMs.

Fortunately, a nuclear war wasn't needed to bring WD-40 to the wider world. Rocket employees began to take the stuff home where they discovered that WD-40 came in handy for all sorts of chores, from lubricating locks to removing squashed bugs from windshields. Rocket Chemical began retailing WD-40 in aerosol form in 1958 and changed the company name to WD-40 in 1969. By 1993, sales had reached $100 million.

There's another twist. To avoid having to reveal WD-40's secret formula, the company never patented it, a move that opened the door for competitors like 3M to market similar formulas. But nothing has unseated WD-40 as the No. 1 miracle mixture. Surely, that geek-chic name's got much to do with it. But according to Eric Miltsch, founder of Command Z Automotive Consulting, it is also about familiarity. "The product connects to a childhood memory," he said. "There was always a can in the garage. People have an inherent need to fix things. This is one of those end-all, be-all things that do it." 

 

 






April 14th 2015 Marketing, Technology

Another Competitive Keyword Advertising Lawsuit Fails–Infogroup v. DatabaseLLC

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The plaintiffs run several well-known databases, such as infoUSA and Salesgenie. The defendants are former employees of plaintiffs who split off and launched a competitive rival. The plaintiffs are upset that the defendants’ databases contain fake listings created by the plaintiffs, despite the marketing claim that the defendants’ databases are “verified.” The plaintiffs are also upset about what they perceive as various marketing overclaims that relate to the companies’ common history.

Defendants bought plaintiffs’ trademarks as AdWords. Like most recent cases, the trademark claims go nowhere (some cites omitted):

Infogroup argues that DatabaseUSA’s use of search engine ad placement services, triggered by Infogroup’s marks, is somehow infringing. The Court is unpersuaded. Although the use of such targeted advertising can be misused, it is generally understood that such tactics can be deployed consistently with the Lanham Act. See, CollegeSource, Inc. v. AcademyOne, Inc., 2015 WL 469041, at *11 (3d Cir. Feb. 5, 2015); 1–800–Contacts, Inc. v. Lens.com, Inc., 722 F.3d 1229, 1242–45 (10th Cir.2013); Network Automation, Inc. v. Advanced Sys. Concepts, Inc., 638 F.3d 1137, 1148–54 (9th Cir.2011); compare N. Am. Med. Corp. v. Axiom Worldwide, Inc., 522 F.3d 1211, 1222–23 (11th Cir.2008) (advertisers created likelihood of confusion by using competitors Web address and trademarks in their own advertisements). The advertisements at issue here, as displayed by Infogroup’s exhibits, do not use Infogroup’s marks in the advertisement itself, and each is either separated from the search results or plainly labeled as a sponsored advertisement. As the Tenth Circuit explained:

Perhaps in the abstract, one who searches for a particular business with a strong mark and sees an entry on the results page will naturally infer that the entry is for that business. But that inference is an unnatural one when the entry is clearly labeled as an advertisement and clearly identifies the source, which has a name quite different from the business being searched for.

Lens.com, 722 F.3d at 1245. And that could explain why Infogroup has presented no evidence to suggest that anyone has actually been confused by the advertisements, or is likely to be. Having considered “(1) the strength of the mark; (2) the evidence of actual confusion; (3) the type of goods and degree of care likely to be exercised by the purchaser; and (4) the labeling and appearance of the advertisements and the surrounding context on the screen displaying the results page,” the Court finds that Infogroup has not shown a likelihood of success under the Lanham Act based on DatabaseUSA’s search engine advertisements.

There are several other interesting nuggets in this opinion:

Something most Californians are completely unfamiliar with. "Eiskratzer" by Stefan Flöper / Wikimedia Commons. Licensed under CC BY-SA 3.0 via Wikimedia Commons.

Eiskratzer” by Stefan Flöper / Wikimedia Commons. Licensed under CC BY-SA 3.0 via Wikimedia Commons.

* the plaintiffs claimed the fictional listings showing up in the defendants’ databases provided evidence of trade secret misappropriation. But web scraping can’t be trade secret misappropriation when it involves publicly accessible data because, by definition, that data can’t be a trade secret any more. The court concludes: “to the extent that Infogroup’s motion is focused on “webscraping,” such conduct is not unlawful under Nebraska [trade secret] law.” I just did a more complete update on scraping law.

* the defendants’ representations that they had “95% Accurate, Triple–Verified Database” was puffery; or at minimum was not false because the inclusion of plaintiffs’ fake listings wasn’t inconsistent with the “verified” representations.

* the court says that a departed employee “is entitled to accurately describe his experience in the industry when marketing his company’s products and services,” so referencing a past employer’s trademark as part of the person’s employment history wasn’t a false association. Compare my discussion about the Robert Half case.

* Although the court sides with the defense consistently, it does tell the defendants that some of their claims may be misleading, so the court says “DatabaseUSA would be well advised to knock it off.” I can’t recall another time I’ve seen a judge use this informal colloquialism as an admonishment. However, I bet judges silently think this many, many times a day during courtroom proceedings.

Case citation: Infogroup, Inc. v. DatabaseLLC, 2015 WL 1499066 (D. Neb. Mar. 30, 2015)
___

Some Related Posts on Keyword Advertising

* Damages from Competitive Keyword Advertising Are “Vanishingly Small”

* More Defendants Win Keyword Advertising Lawsuits

* Another Keyword Advertising Lawsuit Fails Badly

* Duplicitous Competitive Keyword Advertising Lawsuits–Fareportal v. LBF (& Vice-Versa)

* Trademark Owners Just Can’t Win Keyword Advertising Cases–EarthCam v. OxBlue

* Want To Know Amazon’s Confidential Settlement Terms For A Keyword Advertising Lawsuit? Merry Christmas!

* Florida Allows Competitive Keyword Advertising By Lawyers

* Another Keyword Advertising Lawsuit Unceremoniously Dismissed–Infostream v. Avid

* Another Keyword Advertising Lawsuit Fails–Allied Interstate v. Kimmel & Silverman

* More Evidence That Competitive Keyword Advertising Benefits Trademark Owners

* Suing Over Keyword Advertising Is A Bad Business Decision For Trademark Owners

* Florida Proposes to Ban Competitive Keyword Advertising by Lawyers

* More Confirmation That Google Has Won the AdWords Trademark Battles Worldwide

* Google’s Search Suggestions Don’t Violate Wisconsin Publicity Rights Law

* Amazon’s Merchandising of Its Search Results Doesn’t Violate Trademark Law

* Buying Keyword Ads on People’s Names Doesn’t Violate Their Publicity Rights

* With Its Australian Court Victory, Google Moves Closer to Legitimizing Keyword Advertising Globally

* Yet Another Ruling That Competitive Keyword Ad Lawsuits Are Stupid–Louisiana Pacific v. James Hardie

* Another Google AdWords Advertiser Defeats Trademark Infringement Lawsuit

* With Rosetta Stone Settlement, Google Gets Closer to Legitimizing Billions of AdWords Revenue

* Google Defeats Trademark Challenge to Its AdWords Service

* Newly Released Consumer Survey Indicates that Legal Concerns About Competitive Keyword Advertising Are Overblown

April 13th 2015 Marketing

Q4 2014 & Q1 2015 Quick Links Part 4 (Potpourri)

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Photo credit: 3D Quick Link Crossword // ShutterStock

Photo credit: 3D Quick Link Crossword // ShutterStock

Commerce

* NAD tells CheapoAir that it can’t run keyword ads showing the lowest priced flight in its database if it can’t deliver that fare to the consumer.

* United Airlines sues 22-year-old who found a method for buying cheaper plane tickets. The complaint.

* 9th Circuit says the Americans With Disabilities Act doesn’t apply to eBay (Earll v. eBay) or Netflix (Cullen v. NetFlix). Compare to the Vermont district court ruling in NFB v. Scribd case.

* Time: The Rise and Fall (and Rise and Fall) of eBay

* Wired: How Etsy Alienated Its Crafters and Lost Its Soul

* NY Times: Alibaba Will Help Curb Export of Recalled Items. Related blog post.

* Recorder: FedEx Says It Can’t Face Charges for Illegal Drug Shipments

* MacKinnon v. IMVU, Inc., 2014 WL 306842 (Cal. App. Ct. Oct 30, 2014). Depriving consumers of virtual assets may be actionable.

* Cracked: 21 Tricks Stores Use to Control Your Brain

* Associated Press: How Restaurants Get You to Spend More

* Cracked: 5 Weird Things I Learned Selling My Used Panties on Reddit. The Internet makes markets more efficient.

Silk Road

Wired: Not Just Silk Road 2: Feds Seize Two Other Drug Markets and Counting

Wired: How a Russian Dark Web Drug Market Outlived the Silk Road (And Silk Road 2)

* Wired: How the Dark Web’s New Favorite Drug Market Is Profiting From Silk Road 2’s Demise

* Fusion: 5 other insane things a corrupt DEA agent did while allegedly stealing Bitcoin from Silk Road

Uber

* Farhad Manjoo: Uber, a Start-Up Going So Fast It Could Miss a Turn

* BuzzFeed: What Uber Drivers Really Make (According To Their Pay Stubs)

* WSJ: Uber Laws: A Primer on Ridesharing Regulations

* Wired: There Are Good Reasons Why People Love to Sue Uber

Trespass

* Facebook v. Grunin (N.D. Cal. Jan. 8, 2015)

Facebook is entitled to default judgment on the Section 1030(a) and Section 502(c) claims because the complaint alleged, inter alia, that after Grunin’s access was terminated and after he received two cease-and-desist letters, Grunin intentionally accessed Facebook’s computers and servers to obtain account credentials, Facebook credit lines, Facebook ads, and other information, causing more than $5,000 in losses to Facebook. Grunin intentionally circumvented Facebook’s technical measures by impersonating others to obtain Facebook accounts to run ads which were never paid for.

* Law360: Craigslist Submits $2.1M Judgment Deal In Site Scraping Suit. Related post.

* Medium: The Troll’s Lawyer.

Contracts

* NJ.com:  What happens when a ‘thirty-seven-fifty’ bottle of wine really costs $3,750. Related blog post.

* Craigslist’s second amended complaint against 3Taps.  Prior blog post.

* NY Times: One-Third of Top Websites Restrict Customers’ Right to Sue

* Joshua Mitts, “How Much Mandatory Disclosure is Effective?“: “three warnings had little impact on contracting decisions but six warnings caused 20-30% fewer participants to choose the warned-of provider regardless of the discount size. Three and six warnings equally led to an improvement of 9-10% in consumer understanding, suggesting that a long list of disclosures induces cognitive overload.”

* Sacchi v. Verizon: “Whether or not amendments posted to Verizon’s website provided sufficient notice to Plaintiff, the fact remains that Plaintiff subsequently received other forms of notice that adequately informed him of the amendments and that clearly provided that continued use of Verizon’s services would be deemed acceptance of the new terms.”

* Washington Post: Teen volleyball player takes her dispute to another kind of court

Idea Protection

* Star Trek TOS, second season, I, Mudd episode:

MUDD: Yes, well, I organised a technical information service bringing modern industrial techniques to backward planets, making available certain valuable patents to struggling young civilisations throughout the galaxy.
KIRK: Did you pay royalties to the owners of those patents?
MUDD: Well, actually, Kirk, as a defender of the free enterprise system, I found myself in a rather ambiguous conflict as a matter of principle.
SPOCK: He did not pay royalties.
MUDD: Knowledge, sir, should be free to all.

* Yahoo: The U.S. Government Has a Secret System for Stalling Patents. WTF?

* BNA: The Plant Variety Protection Act—An Increasingly Important Form of Intellectual Property Protection for Plants

* The Recorder: Publicly Traded NPEs Take Investors for a Bumpy Ride

* Section 8.5 of Amazon’s AWS contract purportedly gives Amazon a perpetual patent license to its customers’ patents. Really?

* NY Times: During Bakery Break-In, Only Recipes Are Taken

* NY Times on how home contractors are being required to sign NDAs before working on the homes of tech execs.

* Jim Bessen: How Companies Kill Their Employees’ Job Searches

Email

* NY Times: Vague Email Rules Let Federal Agencies Decide When to Hit Save or Delete

* Gizmodo: Senator on Internet Policy Subcommittee Has “Never Sent an Email”. NY Times: Storing Emails From These Senators Will Be Easy, if They Ever Send One.

Crime

* WaPo: Holder limits seized-asset sharing process that split billions with local, state police. Related: WSJ: Legislation to Curb Civil Forfeiture Advances in States

* Wired: The Sneakiest Way Prosecutors Get a Guilty Verdict: PowerPoint

* Washington Post: Why livestreaming apps like Meerkat and Periscope will be a huge boon for cops

Litigation

* The Atlantic on a way to bypass restrictions on class action lawsuits (spoiler: use technology to coordinate individual claims).

* Katz v. Lester Schwab Katz & Dwyer (NY Sup Ct Dec 10, 2014). Bloggers’ reporting on case proceedings is privileged.

Lawyers

* ABA Journal: 100 innovations in law

* ABA Journal: When making things free means gaining more interest (about free online document generators offered by big law firms).

* ABA Journal: Lawyers of Reality TV

* Mental Floss: 11 Legal Cases with Crazy Names

Miscellaneous

* NY Times: How One Stupid Tweet Blew Up Justine Sacco’s Life. I tested on her story in my Fall 2014 Internet Law exam.

* Washington Post: Why digital natives prefer reading in print. Yes, you read that right.

* WSJ: Policing Vanity License Plates Is No Job for an EJIT

* Washington Post: Barbie sales are nose-diving. Maybe they should revive their ad campaign where they use the Aqua ‘Barbie Girl’ song?

* Why does Comcast’s customer “service” suck so bad? Cracked has the answers.

* Oddee: 10 Incredible Instagram Fails

* Cracked: 8 Things That Broke the Internet in 2014 (for a Minute)

* Cracked: 6 Insane Details of Corrupt Politics That Movies Get Wrong

April 12th 2015 Marketing

4th Post – Recipes For Practical Customer Experience Design & Optimization # CRO #UX #CX

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persona_BLPlease read the just published Personas: The Key Ingredient In Design For Conversion. It is the fourth in a series of six Recipes For Practical Customer Experience Design & Optimization posts.

In case you missed them, the first four posts are:

I. Pre-mortem because it is the antidote to Murphy’s Law 

First we’ll explore the most impactful step of the process, the pre-mortem. Some of our largest conversion wins over the last two decades ever were the result of our clients going through the pre-mortem exercise.  Murphy’s law states that everything that can go wrong usually will and a pre-mortem will help you spot previously invisible problems in your current customer experience as well as plan against future problems. But the pre-mortem step is not for the faint hearted as it may show you things about your precious baby that are not as attractive as you wanted to believe.  The only thing that makes a pre-mortem more powerful is by doing a pre-mortem on a persona by persona and then scenario/ campaign by scenario basis.

II. Reverse chronology because it explains conversions

Assuming you have a product or service worth buying then you and your customers have the same goal.  You want to sell and they want to buy. That’s why when you are planning a customer experience it is always best to start at the end point and work your way backwards to the beginning.  This step requires you to get very specific about how and why every decision and action needs to be taken in the buying journey.  It’s specificity also makes this step important to measuring and optimizing your customer experience when you finally implement it. Your Buyer Legend isn’t fiction so every detail must be accounted for, not only that but you must create persuasive momentum at every step.

III. Persuasive momentum because there’s no such thing as a sales funnel

Your customer isn’t truly in a funnel. There’s no gravity compelling them through your experience like there is in a real funnel. There is only the customer’s motivation and your understanding of that motivation to create persuasive momentum. Persuasive momentum is the progressive decision making process that aligns the customer’s goals with our own business goals. I’ll show you the three step test that will insure your customers’ experiences are always relevant, valuable and compelling.

IV. Personas because their motivations become your action plan

Personas are a common marketing tool, but their value is often misunderstood. Simply put, personas should inform you about exactly what you need to be doing. Personas can be elaborate constructs based on reams of research and data, or they can be constructed quickly with data and information at hand, but as long as they are directionally accurate reflections of a segment of your customer they can be powerful tools that will guide your Buyer Legends processes. I will be discussing how to construct ad-hoc personas as well as help you evaluate and if needed fix your current personas if you have them.

The next two will be published soon:

V. Write a Buyer Legend because the only story that matters is your customers’ story

This is the step when you actually pull out your pots, grab a spatula and fire up your burners.  I will tell you all the ingredients to include so you can have them at the ready. This is the step where all your previous work begins to pay off and when you’re done you will have an action plan that can be distributed, implemented, tested, and optimized.  A Buyer Legend is where the rubber meets the road.

VI. Measurement because if analysts cannot tell the stories and business people cannot measure the stories then the strategy isn’t truly aligned with customers’ needs.

Your Buyer Legend isn’t fiction, it’s not for fun or for entertainment, or even for creative fulfillment.  This is business, and anything important to a businesses success should be measurable and accountable.  Buyer Legends are both and I will give you a primer on measuring, optimizing, rinsing, and repeating.

We hope you enjoy the series and as always, we encourage you to try Buyer Legends for yourself, but if you need help, please let us know.

The post 4th Post – Recipes For Practical Customer Experience Design & Optimization # CRO #UX #CX appeared first on Bryan & Jeffrey Eisenberg.

April 10th 2015 B2B, Marketing

Company’s Social Media Accounts Transferred in Bankruptcy

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This case addresses whether social media accounts used in connection with a business become property of the bankruptcy estate.

The debtor, known as “Tactical Firearms,” was formed by Jeremy Alcede. Originally it was owned by Alcede and his then-wife, but it took on an investor in 2011. Dissension developed between the investor and Alcede. Following a derivative action and several defaults, Alcede caused the company to file a Chapter 11 petition. The main investor, Wilson, proposed a reorganization plan, which the court approved. One element of the plan required Alcede to turn over the passwords to any company social media accounts.

Are the accounts personal or business accounts? Alcede took the position that the accounts were not purely personal accounts. As to the Facebook account (a company page), he argued that the account was an off-shoot of his personal account, which he started when he exceeded or was about to exceed the 5000 friend limit on Facebook. He also argued with respect to both accounts that his personal updates were mixed in with his business updates.

The court rejects his arguments on all counts:

The Court is skeptical of Mr. Alcede’s purported rationale for creating the Tactical Firearms Facebook Page. .. However, even if Mr. Alcede did indeed create the Tactical Firearms Facebook Page because he was approaching the Friend limit, it would not affect the character of the Tactical Firearms Facebook Page. It may be true that Mr. Alcede, like many small business owners, closely associated his own identity with that of his business, so closely that he entitled the Facebook Page “Tactical Firearms” “for people to know it was me.” Nonetheless, Mr. Alcede and the Debtor are—and always have been—two distinct legal entities, with separate and distinguishable property. The fact that the Tactical Firearms Facebook Page was created in the name of the business, was linked to the business’s web page, and was used for business purposes places it squarely in the category of property of the Debtor’s estate (and now property of the reorganized Debtor) and not personal property of Mr. Alcede.

Mr. Alcede’s emphasis on the “personal” character of the social media accounts is inconsistent with his emphasis, at prior hearings in this Chapter 11 case—when he was still in control of the Debtor—of the substantial amount of time he spent using these accounts for business purposes. For example, at one of the initial hearings in this case on the amount of salary Mr. Alcede should draw from the estate, Mr. Alcede testified that he answers “thousands” of Facebook Messages each day and stays up late commenting publicly on the Facebook Page. Mr. Alcede also described his activity on the Facebook and Twitter accounts as a significant business activity: “It’s just very important that I stay in tune with social media because that’s how people follow us and that’s how they support us and that’s how they hear about what we’re doing.” Mr. Alcede now attempts to distinguish Messages as an ancillary feature of Facebook, while upholding Posts as the core feature.(“The posts, which is the meat and potatoes and the gist of Facebook, are my personal, and that has never changed”). The Court finds no reason to accept Mr. Alcede’s arbitrary elevation of one Facebook feature over another, and finds that Mr. Alcede’s use of Facebook Messages to communicate with customers through the former Tactical Firearms Facebook Page, in addition to his clearly business-related posts, is strong evidence that the former Tactical Firearms Facebook Page is a business Page.

The court also rejected Alcede’s arbitrary split of personal versus business, embracing many a modern marketer’s advice that in the era of social media, it all flows together. Alcede points to a gun show tweet as an example of a personal tweet—i.e., one that didn’t advertise any products or services. The court says this is not the defining factor:

The very nature of social media dictates that its best use for business is somewhat more subtle than other forms of marketing. A Tweet advertising the fact that the owner of a gun store is at a gun show, far from being especially “personal” in nature, is a perfect example of this kind of subtle marketing. This Tweet most assuredly served to develop Mr. Alcede’s reputation as being a well informed, connected insider in the gun-buying community, a reputation that would attract consumers to the business of Tactical Firearms that he was running at the time he issued this Tweet.

In other words, the gun show tweet is an example of activity that develops thought leadership. Alcede often mixed in political tweets with his gun-related tweets; as part of his creative marketing campaign ran a marquee that fans could submit message to (the winner would receive a one year family gold range membership). Again, the court says that the political messaging are a “manifestation of [Alcede’s self-described] PR genius”.

The court does not lay out a definitive test for determining the character of the social media account (business or personal?), but a few things clearly influence the court’s decision: (1) the accounts were named after the business; (2) the accounts were linked to the business web-page; (3) Alcede granted an employee with access to post to one of the accounts; and (4) many of the posts promoted the business, or products or services offered by it.

What about Alcede’s interest in privacy or personal goodwill? Alcede also argued that to require him to turn over the pages would infringe on his privacy and misappropriate his goodwill. The court said this is insufficient to prevent turn over of control over the account to the company. An employee posting stray personal messages to a company account can be analogized to an employee who uses work to send personal messages once in awhile. Also analogizing to the client’s waiver of attorney-client privilege, the court says that Alcede waived whatever privacy he may have had in stuff posted to the business account.

The court likewise rejects any argument that requiring the accounts to be transferred somehow misappropriates Alcede’s personal goodwill. The court says that the page embodies his professional goodwill (if anything) and any such goodwill can follow a departed employee:

recognizing the business social media accounts as property of the reorganized Debtor does not deprive Mr. Alcede of any of this professional goodwill, if it indeed exists. The line of demarcation between professional and personal goodwill is precisely the line between goodwill that departs with the professional and goodwill that remains with the business. Therefore, Mr. Alcede is unimpeded in his ability to control whatever property interest he legitimately holds in the reorganized Debtor’s social media accounts. Whichever followers embody the goodwill that legitimately inheres in Mr. Alcede, as opposed to the corporate reorganized Debtor, are free to follow him to his own personal Facebook Page, entitled “Jeremy Alcede Patriot,” and to a personal Twitter account which he is free to reestablish with the title “Jeremy Alcede” and Handle “@jeremyalcede.” The extent of the loss of followers to the business accounts and subsequent gain in followers by Mr. Alcede will reflect the true extent of his personal interest in the accounts.

The scope of relief: Finally, the court also grapples with the appropriate remedies. It turns out Alcede renamed the “Tactical Firearms” page to “Jeremy Alcede Entrepreneur”. As the court notes, Facebook’s policies only allow the user to request this change once. The court also observes that Alcede had been posting content to the page that was disparaging or negative to the business. Accordingly, the court orders Alcede to turn over access to the page to the reorganized entity and cease posting such comments. While only Facbook can rename the page a second time, the court says that the reorganized debtor can pursue the issue with Facebook and if necessary, come back to court for relief.

Resolution of the issue is a bit simpler with respect to the Twitter account. The court says that Alcede needs to change the password and email to one he’s willing to share and then turn over this information to the reorganized debtor. (Prior to doing so, Alcede will likely change the name from his personal name to something else so he can re-establish another account with his personal name).

___

This is probably the most detailed look by a court at when a social media account is business or personal. As the court recognizes, often accounts are mixed. The court’s analysis gives (mostly common sensical) clues as to what indicia is likely to sway courts. Bankruptcy has raised interesting privacy and branding issues (domain names, trademarks, customer lists). Add this to the pile of foundational cases on this topic.

A few issues that were discussed implicitly but that were surprising to see the court not mention: (1) the effect of social media password laws; (2) the privacy in any personal messages Alcede may have sent or received through the accounts; and (3) whether forcing Alcede to turn over the passwords comports with Facebook’s and Twitter’s terms of services. The court’s waiver discussion ostensibly addresses the first two points, but it was nevertheless surprising to not see them expressed directly. As previously noted, social media privacy laws don’t offer specific guidance to resolving these types of issues.

Also, following the order, it looks like Alcede is going to take a firm stand, and will not be giving up his passwords quietly: “TEXAS MAN FACES JAIL AT HIGH NOON: REFUSES TO SURRENDER FACEBOOK PASSWORD TO BANKRUPTCY JUDGE” (Breitbart)

Case Citation: In re Ctli, 2015 Bankr. LEXIS 1117 (S.D. Tx. Apr. 3, 2015)

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April 9th 2015 Marketing