Retailer’s TOS Fails, But New Jersey Warranty Notice Claim Loses Anyway

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Screen Shot 2017-03-23 at 3.51.22 PMPlaintiff alleges that she purchased a cosmetic product from Lush Internet. While she did not allege anything was wrong with the product and does not appear to have any other qualms with the transaction itself, she alleged that Lush’s terms of service contains provisions that conflicted with New Jersey’s Truth in Consumer Contract, Warranty and Notice Act (TCCWNA). Specifically, she argued that Lush’s Terms of Service violated TCCWNA because it disclaimed all liability, absolved Lush of its duty to protect customers from harm, and limited consumers’ rights under product liability law and the UCC.

Lush moved to compel arbitration and also moved to dismiss.

Arbitration: Plaintiff argued that:

because the Terms of Use are hidden in an inconspicuous hyperlink at the bottom of Defendant’s homepage, and because Lush’s website does not require users to “take affirmative action to manifest their assent” to the Terms of Use, the agreement to arbitrate is not enforceable as against her.

The court focuses on reasonable notice and whether the website terms were conspicuously displayed to the consumer. The court concludes that the “design and content” of the website did not amount to clear display, so a reasonably prudent user would not be on notice (citing Nguyen; Specht; Zappos; Hines). The court also notes that Lush did not require users to assent to the terms:

[t]he purchase can readily be completed without the user viewing the terms which relinquish important and customary rights . . . . Without viewing, the user can have no knowledge of the terms, including these waivers.

The court further notes that while the site admonishes users to read the terms, this admonition is not on the home page.

Screen Shot 2017-03-23 at 3.53.23 PMThe Merits: Turning to the plaintiff’s qualms with the Terms of Use, the court notes that the plaintiff takes contradictory positions. On the one hand, she says she never read and agreed to the terms, but on the other she is complaining about provisions in the terms. The court looks at the definition of “consumer” and says it’s not clear whether the statute covers just buyers who purchase household items or something broader.

Setting this aside, the court says plaintiff lacks standing under Spokeo. The Supreme Court in Spokeo said that plaintiffs who allege “bare procedural violations” lack standing. And that was the case here:

Here, because Plaintiff did not assent to the Terms of Use, they simply do not bind her as a matter of contract law. Because Plaintiff does not seek to vindicate any underlying rights secured by the TCCWNA – i.e. she is seeking only to bring the Terms of Use into accord with what she believes New Jersey law requires, not to actually bring a suit or recover damages which she believes are unlawfully barred by the Terms of Use – she does not have standing to sue. Moreover, because the Terms of Use were not displayed to her, she cannot claim harm from their existence in a hidden corner of the Lush website. Based upon the allegations in the Amended Complaint, the harm that Plaintiff has suffered from the allegedly unlawful limitations of liability in the Terms of Use is metaphysical at best. Her strongest allegation of harm is that she was present and made a purchase on a website that, unbeknownst to her, had terms that she now claims are objectionable under the TWCCNA.

The court also reiterates that a plaintiff who argues she has not read and is not bound by terms cannot then complain about provisions in those terms.

__

Ouch. Lush’s terms of service implementation leaves a lot to be desired. As we’ve noted countless times on the blog, it’s trivially easy to implement an enforceable online agreement. Although the court’s order does not include screenshots of Lush’s implementation, I’ve included a few screenshots of its current implementation, which appears to be the same as it was in 2016 (the year of the lawsuit).

Notwithstanding the Terms of Service snafu, the court brushes aside what is an obviously flawed lawsuit. There have been a spate of these lawsuits targeting the purported noncompliance with the New Jersey statute by website terms, but they don’t appear to be getting much traction. The Spokeo ruling was equivocal at best, but the “bare procedural violation” language was a bone to defendants. This is a good example of how it can come into play.

Case citation: Hite v. Lush Internet, 2017 U.S. Dist LEXIS 40949 (D.N.J. Mar. 21, 2017)

Related posts:

Anarchy Has Ensued In Courts’ Handling of Online Contract Formation (Round Up Post)

Courts Approve Terms of Service-Based Arbitration Clauses for Uber and Groupon

“Modified Clickwrap” Upheld In Court–Moule v. UPS

Evidentiary Failings Undermine Arbitration Clauses in Online Terms

Court Enforces Arbitration Clause in Amazon’s Terms of Service–Fagerstrom v. Amazon

‘Flash Sale’ Website Defeats Class Action Claim With Mandatory Arbitration Clause–Starke v. Gilt

Some Thoughts On General Mills’ Move To Mandate Arbitration And Waive Class Actions

Second Circuit Says Arbitration Clause in Terms Emailed After-the-Fact Not Enforceable – Schnabel v. Trilegiant

Users Can’t Sue Sony for Changing Online Terms to Require Arbitration – Fineman v. Sony Network Entertainment

Qwest Gets Mixed Rulings on Contract Arbitration Issue—Grosvenor v. Qwest & Vernon v. Qwest

Zynga Wins Arbitration Ruling on “Special Offer” Class Claims Based on Concepcion — Swift v. Zynga

“Modified Clickwrap” Upheld In Court–Moule v. UPS

Facebook Gets Bad Ruling In Face-Scanning Privacy Case–In re Facebook Biometric Information Privacy Litigation

Defective Call-to-Action Dooms Online Contract Formation–Sgouros v. TransUnion

Court Rejects “Browsewrap.” Is That Surprising?–Long v. ProFlowers

Telephony Provider Didn’t Properly Form a “Telephone-Wrap” Contract–James v. Global Tel*Link

2H 2015 Quick Links, Part 7 (Marketing, Advertising, E-Commerce)

Second Circuit Enforces Terms Hyperlinked In Confirmation Email–Starkey v. G Adventures

If You’re Going To Incorporate Online T&Cs Into a Printed Contract, Do It Right–Holdbrook v. PCS

Clickthrough Agreement Upheld–Whitt v. Prosper

Online Magazine Gets Section 230 Protection For Third Party Article–AdvanFort v. International Registries

The “Browsewrap”/”Clickwrap” Distinction Is Falling Apart

Safeway Can’t Unilaterally Modify Online Terms Without Notice

March 25th 2017 Marketing

Would you like to Brand Like Amazon? Even a Lemonade Stand Can Do It

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Brand Like Amazon preview coverSome of you might have seen through our social media channels that Jeffrey and I have been working on a new book with our friend and mentor Roy H Williams. We have been sharing a new chapter every week. This Monday we will release Chapter 11. The book has only 12 chapters.

If you would like to be among the first to read the book head over to BrandLikeAmazon.com. If you subscribe you will receive by email a PDF of the first 3 chapters and then you will receive a new chapter every 2 days. Do not miss chapter 10 ”</p

March 11th 2017 Marketing

Section 230 Protects Grindr From Harrassed User’s Claims–Herrick v. Grindr

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This is a well-constructed and thoughtful Section 230 ruling. If this case keeps going in the same direction, it has the potential to become a major Section 230 precedent.

Herrick claims that ex-boyfriend JC used Grindr to launch a vicious five-month e-personation attack. JC allegedly created fake dating profiles in Herrick’s name, with his contact info, saying Herrick wanted sex; with the predictable result that allegedly hundreds of horny men responded to the profiles and sought out Herrick at his home and workplace. Craigslist has been used for similar attacks for a long time, and California created an “e-personation” crime to combat them. Herrick further claims he’s contacted Grindr over 50 times about this harassment campaign and never received a response other than a form acknowledgement email.

Herrick sued Grindr in state court and got an immediate TRO instructing Grindr to “immediately disable all impersonating profiles created under Plaintiff’s name or with identifying information relating to Plaintiff, Plaintiff’s photograph, address, phone number, email account or place of work.” Grindr removed the case to federal court. The court’s opinion is in response to Herrick’s request to extend the TRO. The court denies the request.

Section 230

If you are a Section 230 fan, I encourage you to read the opinion’s entire discussion about Section 230. It’s not that long, and I considered quoting the whole thing. It’s worth the read.

The court starts out: “At this early stage, it appears likely to the Court that Section 230 bars many (if not all) of Plaintiff’s tort claims,” including the negligence, IIED, NIED and failure to warn claims.

The plaintiff argued that Grindr’s “sorting and matching functions and geo-locational services” turned it into a content creator. The court shuts that down: “Plaintiff’s attempt to artfully plead his case in order to separate the Defendant from the protections of the CDA is a losing proposition.” The court explains:

The fact that an ICS contributed to the production or presentation of content is not enough to defeat CDA immunity.

The court then tries to engage with the Ninth Circuit’s Roommates.com precedent. On the plus side, this is yet another case where a court cites Roommates.com for the defense. On the minus side, the court does so by adopting the Roommates.com nomenclature of “neutral assistance,” a problematic and fundamentally incoherent phrase. On the plus side, unlike the Roommates.com case, this court actually defines what “neutral assistance” means: “tools and functionality made available equally to malefactors and the application’s intended user-base.” The court applies this definition:

Plaintiff has not identified any acts by Grindr—other than “neutral assistance”—that might make Grindr the “provider” of the false profiles created by JC. The Complaint describes the information collected by Grindr to set up an account, such as a profile photograph, name, and “about me” and “I’m looking for” sections. Add-on services allow users to block other users, swipe between profiles, and filter by additional categories. All of these functions appear to be available equally to all Grindr users

This leads to a quotable/tweetable line:

The fact that these offerings have been weaponized by a particular Grindr user does not make Grindr the creator of the allegedly tortious content.

The court further distinguishes the Roommates.com precedent by saying “there is nothing inherently illegal about the Grindr features described in the Complaint. Critically, Grindr has not contributed anything to the objectionable profiles; the profiles are objectionable solely because of the false
information supplied by Plaintiff’s tormenter.”

Citing Gibson v. Craigslist, the court concludes the Section 230 discussion by saying “Allegations premised on an ICS’s failure to “block, screen, or otherwise prevent the dissemination of a third party’s content,” seek to hold the defendant liable in its capacity as a “publisher.””

In a footnote, the court addresses a belated plaintiff argument that Grindr is “inherently dangerous”:

the product is only dangerous in combination with the sort of false content JC has created. While the Court gives Plaintiff credit for his creativity in formulating this argument, his claim rests, at bottom, on the tortious nature of the content that JC created and posted. Congress has clearly stated that an ICS cannot be liable for offensive content created by others. Plaintiff’s theory that Grindr has created a platform that is susceptible to misuse is fundamentally the same.

We’ve seen other attempts to invoke products liability theories to work around Section 230 (Doe v. MySpace comes immediately to mind) but this footnote is the cleanest rejection of the theory I can recall.

Perhaps surprisingly, the court doesn’t discuss any other Section 230 e-personation cases–the most conspicuous omission being the Ninth Circuit’s Carafano case, which perhaps the court felt was eclipsed by the Roommates.com case, or perhaps the more recent Caraccioli v. Facebook ruling. But this case has significant implications for future cases over fake profiles, in the dating context or elsewhere. The bottom line: Section 230 robustly protects against liability for third party-created fake profiles.

Misrepresentations

The court summarizes this part of the opinion: “While the CDA may not apply to Plaintiff’s claims based on false advertising and deceptive business practices (Counts II, III, & VII), Plaintiff has not made an adequate showing of his prospects for success on those claims, and they appear to the Court to be untethered from any of Plaintiff’s alleged injuries…Plaintiff’s injuries are so attenuated from the misstatements that it is highly unlikely Plaintiff will be able to prove causation.” I don’t think Section 230 is as categorically irrelevant to false advertising/deception as the court treats it, but the court gets to the right place anyway.

Herrick claims he joined Grindr in 2011 because he thought it was a “safe space.” He met JC on Grindr 4 years later, dated for a year, then things went south. The court questions the legal implications of this string of events:

the only connection between Plaintiff’s present day injury and Grindr’s alleged misrepresentations approximately five years ago is the fact that Plaintiff would not have otherwise joined Grindr in 2011 and would not have otherwise met JC. This is an exceedingly remote connection. The fact that “but for” Grindr’s advertising, Plaintiff would not have joined Grindr some five years before the harassment relevant to this case—assuming that to be true—is insufficient, standing alone, to establish causation.

The court says that Herrick’s failure-to-warn and contract breach claims all stem from the same underlying concern about product safety, so the court lumps them together with the misrepresentation discussion.

Conclusion

The court reaches the right legal result, but I still have questions about what happened here. Was Grindr really used for such a massive and malicious attack; and if so, what, if anything, did Grindr do to help protect Herrick? As a matter of corporate ethics, it would not be OK for Grindr to do nothing. We may get better answers to these questions later. For now, the court notes that Grindr “committed to continue voluntarily to monitor the Grindr application for fake profiles associated with Plaintiff’s personal information as it has in response to the existing TRO even if this Court does not extend the TRO.” That’s a positive step, but if that’s all Grindr did to protect Herrick, it’s a small and way-too-late step.

Because the opinion is so savvy about Section 230, I’m awarding the rare and coveted Technology & Marketing Law Blog Judge-of-the-Day honors to Judge Valerie Caproni. Congratulations, your honor. Opinions like this remind us why the US judicial system is so respected by other countries. May it always be that way.

Case citation: Herrick v. Grindr, LLC, 2017 WL 744605 (SDNY Feb. 24, 2017). Complaint.

March 2nd 2017 Marketing

Illinois Anti-SLAPP Law Doesn’t Apply To Law Firm Blog Posts–Bock & Hatch v. McGuireWoods

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We’re revisiting the important and entirely self-referential issue of defamation liability for blogging about judicial opinions. As I’ve discussed before (this post is perhaps my most heartfelt), blogging about judicial opinions is automatically risky because at least one side has already demonstrated their litigiousness. A wide range of legal doctrines insulate blogging about legal opinions, including the First Amendment, especially the fact/opinion line; courts’ treatment of online discussions as inherently rough-and-tumble; courts’ treatment of hyperlinks as supporting citations; the fair reporting privilege; and anti-SLAPP laws. Unfortunately for us legal bloggers, these legal doctrines have exceptions and limitations that leave us potentially exposed, as illustrated by today’s case.

The defendant is McGuireWoods, one of the 30 largest law firms in the country. In 2011, one of their attorneys, Andrew Trask, blogged at the McGuireWoods-operated “Class Action Countermeasures” blog about a case in which the law firm Bock & Hatch represented the class-action plaintiffs. The 2011 post said, among other things, that “The trial court ruled that, while the firm’s actions displayed a lack of integrity, the proper remedy was discipline by the Illinois bar.” In 2013, Trask blogged a related case, saying the court “stated that in Ashford Gear, ‘one of the plaintiff’s firms, Bock & Hatch, had lied to a witness about keeping a list of possible faxes and recipients confidential.’” Bock & Hatch sued for defamation and violations of Illinois unfair competition law.

McGuireWoods defended on Illinois’ anti-SLAPP law, which protects the “rights of petition, speech, association, or to otherwise participate in government.” Unfortunately, because of the narrow coverage of this old-school anti-SLAPP law, it does not apply to this dispute:

plaintiffs’ lawsuit does not resemble a strategic lawsuit intended to chill McGuireWoods’ participation in government or to stifle its political expression. It appears that the goal of plaintiffs’ lawsuit was not to interfere with and burden McGuireWoods’ free speech and petition rights, but rather to seek injunctive relief for the personal harm to their reputation from McGuireWoods’ alleged acts.

As a result, McGuireWoods’ anti-SLAPP motion failed and the case will proceed.

Would a more modern anti-SLAPP law lead to a different outcome? I believe it would. Although McGuireWood’s posts weren’t about petitioning the government, the posts help track and report on official government proceedings. That is exactly the kind of socially beneficial speech that anti-SLAPP laws should protect. Thus, this ruling reinforces how a federal anti-SLAPP law would upgrade states like Illinois to more modern anti-SLAPP coverage.

The court doesn’t discuss whether McGuireWoods’ blog posts constitute “commercial speech,” a common exception to anti-SLAPP laws. Law firms are important and knowledgeable sources of public commentary about court proceedings and the law, but they aren’t non-profit journalists. Their posts usually help build a commercially valuable reputation and demonstrate expertise that can draw new clients or retain existing ones. Our legal system doesn’t handle the classification of such “dual-purpose” communications very well, especially when characterizing law firm blog posts under lawyer advertising rules. Depending on where this case goes, the commercial speech angle could be important.

There is an extra irony about McGuireWoods’ posts leading to a law suit. Many law firm blogs–especially Biglaw blogs–tend to be fairly straight-laced, i.e., they tend to summarize court rulings and leave it to the reader to infer the implications (in contrast, editorializing and rhetorical hyperbole are common and expected at blogs like mine). This conservative approach to blogging reflects the law firm’s concerns about criticizing judges that the firm’s lawyers might appear before or that any opinions expressed in the blog post will be cited against the law firm in future filings by litigation opponents. Ironically, McGuireWoods’ posts tried to be conservative reports of the court rulings, but they got sued anyway. Thus, I fear this ruling might be interpreted as another reason for law firms to stop blogging altogether.

Case citation: Bock & Hatch LLC v. McGuireWoods, LLP, 2017 IL App (1st) 160294-U (Ill. App. Ct. Feb 14, 2017)

Related posts:

* Bashing Your Litigation Opponent in an Online Message Board? Go For It!
* Law Professor Blogger Wins Anti-SLAPP Ruling, But It’s Hard To Celebrate The Win–Welch v. USD
* Legal Blog Faces Defamation Liability for Mischaracterizing Prior Legal Proceedings–Huon v. Above the Law (and see Now the Seventh Circuit Is Shitting On Section 230–Huon v. Denton)
* Tweeted Article About Law Grad’s Suit Over Stalking Investigation Isn’t Defamatory (and what a sad denouement to the plaintiff’s story)
* Want To Avoid Defaming Someone Online? Link To Your Sources
* Are the Days of Independent Legal Blogging Over?
* Another Court Finds Online Statements With Links Are Not Defamatory – Seldon v. Compass Restaurant
* Business School Professors May Be Liable for Defamatory Blog Post–ZAGG v. Catanach
* Using Links as Citations Helps Gizmodo Defeat a Defamation Claim–Redmond v. Gawker Media

Also: LA Times, Blogger beware: Postings can lead to lawsuits

February 22nd 2017 Marketing

Amazon Defeats Lawsuit Over Its Keyword Ad Purchases–Lasoff v. Amazon

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Lasoff owns Ingrass, which makes artificial turf. He claims he’s losing business to “cheaper, counterfeit” versions of Ingrass. (The opinion uses the term “counterfeit,” though it probably means knockoffs). He objects to the fact that Amazon runs keyword ads for “Ingrass” at the search engines and in promotional emails that are algorithmically programmed for remarketing (i.e., promoting products the email recipient viewed on Amazon but didn’t buy). The promotional email ad copy comes from third party sources. Prospective customers who saw these ads for “Ingrass” were directed to the Amazon product pages containing listings from the alleged counterfeiters.

Section 230

Citing the Ninth Circuit’s ccBill v. Perfect 10 ruling, the court cleans out all of the state law claims (unfair competition, state trademark infringement, tortious interference, negligence and unjust enrichment) due to Section 230. The court says:

The content to which Plaintiff objects (the “Ingrass” keyword and the misrepresentations by copycat competitors that their products are “Ingrass” products) is provided by third parties and the claims which Plaintiff prosecutes attempt to cast Amazon as the “publisher or speaker” of that content….The fact that Defendant created the automated system which identifies the desirable keywords and then propagated advertisements based on those keywords is not what Lasoff seeks to hold it liable for; it is that the information generated by that system is improperly damaging to his legitimate and protected business interest in the brand “Ingrass.”

Though the court reaches a logical result, it’s weird, or perhaps nonsensical, to say that the word “Ingrass” is third party content for Section 230 purposes.

Federal Trademark

Secton 230 doesn’t preempt federal trademark claims, so we move to the prima facie case there. Ingrass isn’t a registered mark, but the court concludes that it’s suggestive. Amazon argued that it hadn’t “used” the mark because its algorithms did all the work, but the court rejects the argument per Network Automation and Rescuecom.

Still, the court is troubled by the prospect of holding Amazon directly liable for trademark infringement because it doesn’t compete with Ingrass. In a footnote, the court explains:

Trademark infringement law is primarily concerned with stopping one person or entity from gaining an unfair competitive advantage over a business rival by misusing a protected mark. No one who offers their product for sale on amazon.com is a “competitor” of Amazon, and attempting to shoehorn the company into a direct trademark infringement framework creates a “square peg-round hole” situation for which traditional trademark law seems ill-suited.

I totally agree, though these analytical problems haven’t always stopped judges before. The court bolsters this intuition with the directly relevant Tiffany v. eBay precedent. The court says:

The Court finds Amazon’s position directly analogous to that of eBay, and further finds that the holding of Tiffany (NJ) – that there are “uses in commerce” which do not subject the user to liability for direct trademark infringement – applicable to this case.

Lasoff argued contributory trademark infringement but didn’t plead it initially, so the court disregards those arguments.

Lanham Act False Advertising

Frustratingly, the court doesn’t address whether Section 230 applies to Lanham Act false advertising cases. I believe it should because those are not “intellectual property” cases; but courts sometimes have nevertheless excluded Section 230 because the Lanham Act false advertising provisions are in the same section as the Lanham Act trademark provisions.

Nevertheless, the court says this claim suffers problems “similar to” the Section 230 analysis–“that the misrepresentations of which he complains originate with third-party vendors, not with Defendant.” Citing the Baldino’s Lock & Key v. Google case, the court says:

Plaintiff attempts to distinguish the case on the basis that the Google advertisements were published directly by the unlicensed locksmiths, but this argument strengthens Defendant’s position: just as Google could not be held liable for reproducing material which it did not know was false, neither can Amazon. Plaintiff fails to draw a meaningful distinction between two interactive computer service providers who created a platform for advertising which contained misrepresentative material generated by third parties. In both instances, liability lies with the vendors who created the misleading content, not the service providers who transmit that content.

Sherman Act Monopoly

Lasoff argued that Amazon dominates keyword ad buys, which the court says would be more accurately framed as a monopsony rather than a monopoly. The court rejects the argument because of the substitutability between search engine keyword ads and other forms of online marketing (cite to Person v. Google) and the presence of many other keyword ad buyers.

Implications

This wasn’t the most well-constructed case from the plaintiff’s side, so Amazon probably welcomed the opportunity to use the case to set some favorable precedent. The net consequence is that Amazon once again sidesteps exposure for the possible presence of knockoffs/”counterfeits” on its site, following cases like the Tre Milano and Milo & Gabby cases. I’m sure the knockoff/coutnerfeit issue isn’t going away for Amazon, even though Amazon says it is taking more aggressive steps to fight illegitimate offerings on the site, but plaintiffs are running out of legal theories that might support a successful case.

Like the eBay case, or perhaps the Jurin v. Google case from a while ago, this case raises the interesting thought-exercise of what messages Amazon itself communicates to prospective consumers when its ads indicate that something related to Ingrass is available on its site. Fundamentally, Tiffany and Ingrass argued that their brand name as the “lure” and that acted as a type of brand-authenticity warranty to consumers. Fortunately, both courts recognized that consumers can assume that the offerings relate in some manner to the trademark without the follow-on assumption that they are only going to see authentic goods from the manufacturer. I’m not sure Section 230 really gets at the conceptual dilemma in that thought-exercise. However, as we saw with some of the infringing-app-name cases, Section 230 does a great job of screening out the para-IP claims so that the court can devote more energy to resolving the underlying IP questions.

The opinion doesn’t mention the Multi-Time Machine v. Amazon case, but that ruling defended Amazon’s use of keywords on its internal search pages. Combined with this ruling, it seems to give online marketplaces a lot of freedom to use third party brands to make matches between consumers and vendors who aren’t the trademark owner.

Case citation: Lasoff v. Amazon.com, 2017 WL 372948 (W.D. Wash. Jan. 26, 2017)

More Posts About Keyword Advertising

* More Evidence Why Keyword Advertising Litigation Is Waning

* Court Dumps Crappy Trademark & Keyword Ad Case–ONEPul v. BagSpot

* AdWords Buys Using Geographic Terms Support Personal Jurisdiction–Rilley v. MoneyMutual

* FTC Sues 1-800 Contacts For Restricting Competitive Keyword Advertising

* Competitive Keyword Advertising Lawsuit Will Go To A Jury–Edible Arrangements v. Provide Commerce

* Texas Ethics Opinion Approves Competitive Keyword Ads By Lawyers

* Court Beats Down Another Competitive Keyword Advertising Lawsuit–Beast Sports v. BPI

* Another Murky Opinion on Lawyers Buying Keyword Ads on Other Lawyers’ Names–In re Naert

* Keyword Ad Lawsuit Isn’t Covered By California’s Anti-SLAPP Law

* Confusion From Competitive Keyword Advertising? Fuhgeddaboudit

* Competitive Keyword Advertising Permitted As Nominative Use–ElitePay Global v. CardPaymentOptions

* Google And Yahoo Defeat Last Remaining Lawsuit Over Competitive Keyword Advertising

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

* 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

February 3rd 2017 Marketing

Actress in Viral Video Can’t Prevent Video From Being Made Into an Advertisement–Roberts v. Bliss

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Bliss produced a viral video called “10 Hours Walking in NYC as a Woman” featuring actress Shoshana Roberts. You probably saw this video when it came out; it has been viewed over 40M times. The video shows how random strangers constantly comment on Roberts’ looks as she walks around NYC. For reasons not specified in the opinion, Bliss didn’t get a written release from Roberts, and she claims he orally promised to pay her if the video succeeded (which it did, but still he didn’t pay). She also claims she made editorial contributions to the video, such as “actively assist[ing] Bliss in deciding how and where to walk, and how to film without the camera being noticed.”

Sadly, the video’s success induced Bliss to sell out; he licensed the video so TGI Fridays could make an ad. The ad uses the NYC settings and the mens’ catcalls, but digitally replaces Roberts with images of french fries and mozzarella sticks that appear to be the target of the mens’ catcalls. The court says: “Because of the superimposition of the giant appetizers, Roberts is not pictured or represented in the ad at all.” (The parties dispute whether Roberts is completely replaced; she claims that some versions showed her hands or feet, but the court says that wouldn’t change the analysis). Here is the 15 second version of the video (there was also a 30 second version that I haven’t yet found):

The court helpfully included some (unfortunately, black-and-white) screenshots comparing the two videos:

roberts1

roberts2

From my perspective, the TGI Fridays ad is terrible. It takes a thought-provoking and educational ad about sexual harassment and turns it into a so-called “parody” about mens’ “love” for fried foods. Sexual harassment isn’t funny, and the TGI Fridays ad implicitly celebrates the catcalls and denigrates the issue’s importance. If I had any prospect of being a TGI Fridays customer, this would prompt me to boycott them; but since I haven’t eaten there in decades and can’t imagine a situation where going to TGI Fridays would be a choice I or anyone in my social network would ever make voluntarily, I don’t think I was really in the target audience anyway.

Anyway, the main question for this blog: when can an actress stop video from being turned into an ad? Regular readers recognize the obvious parallels with the Garcia v. Google case, which also involved an actress trying to use copyrights to control an unwanted usage of video footage of her where (for purposes of the opinion, though maybe not in fact) there was no written contract between the actress and the producer. This is a more favorable case for the defendants because the producers’ alleged deceit was much more modest (maybe over the possible future payout); and the TGI Friday’s video made Roberts unidentifiable whereas the Innocence of Muslims producers just overdubbed dialogue. Fortunately, it also reaches (for now) a defense-favorable result.

This opinion only addresses Roberts’ Lanham Act false endorsement claim.

Persona Use. The court says there’s no endorsement because Roberts isn’t depicted in the ad:

Although the ad may well call to a viewer’s mind the 10 Hours video, and perhaps even Roberts because of her role in it, the ad does not use Roberts’ image or persona, nor suggest in any way that Roberts herself endorsed the product advertised.

The court then references a number of very familiar cases where the plaintiff claimed the offending ad invoked their fame (most of which Rebecca and I discuss in our Advertising Law book), including Waits v. Frito-Lay, White v. Samsung (the Vanna White Robot case), Oliveira v. Frito-Lay (the Girl from Ipanema case), and Burck v. Mars (the Naked Cowboy case). The court says maybe a person’s movements could be sufficiently distinctive (such as Michael Jackson’s moonwalk, though he didn’t originate the move) to comprise someone’s “persona,” but Roberts didn’t claim that. The court also says that claims an ad takes someone’s “signature performance” also have repeatedly failed, specifically analyzing the Oliveira case.

Likelihood of Consumer Confusion. The court says there’s no possibility that ad viewers would be confused into thinking Roberts endorsed TGI Fridays:

Plaintiff here has not plausibly alleged that the advertisement creates consumer confusion because any viewer would understand the ad to be engaged in a parody of 10 Hours. While the advertisement does “call to mind” 10 Hours, the supplantation of Roberts with large gimmicky images of appetizers is an “obvious[] modification” of, and a “conscious departure” from, the original work. This modification, moreover, is outlandish, not subtle….The ad replaces Roberts—the object of the harassing men’s attention in the 10 Hours video—with the appetizers. They are now the subject of the men’s desire. That, together with the play on words between “appcalling” and “catcalling,” is what makes it a parody. And because the parody is obvious, the “risk of consumer confusion is at its lowest.”… That Roberts, of course, looks nothing like the overblown images of walking food, and that an online video designed to highlight a societal ill and a chain restaurant attempting to promote its appetizers occupy distinct merchandising markets, reinforces the conclusion that it is implausible that a viewer of the ad would be confused about whether Roberts endorsed it.

If “outlandish” means mean-spirited, venal and offensive, then I fully agree.

Finding no Lanham Act violation, the court dismisses the claim. It declines to retain supplemental jurisdiction over the state law claims (breach of contract and covenant of good faith and fair dealing, violation of NY Civil Rights Law Sections 50-51, violation of the right of publicity, quantum meruit, and unjust enrichment).

So what are the lessons from this case? Well, the big one: if you are producer and hiring an actor/actress for a video you hope will go viral, for god sakes, PLEASE get a written release. A less-obvious one: if you’re going to make a thoughtful and insightful video about sexual harassment and are lucky enough to go viral, please don’t sell out the video to advertisers. And if you’re still a TGI Fridays’ customer, good god, what are you thinking?

Case citation: Roberts v. Bliss, 2017 WL 354186 (SDNY Jan. 24, 2017). Roberts’ statement about the lawsuit.

January 27th 2017 Marketing

Restaurants Creating Crave on Instagram

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According to a post on the Instagram Business blog the number one driver of visits to restaurants is the act of craving. In advertising this simply means making people hungry for what your are selling. Restaurants love Instagram because of its visualness, its frequent use of video in posts and probably most importantly, its primarily consumed on a mobile device.

A 2015 study showed that 53% of frequent diners and 41% of occasional diners use their mobile phone to decide on a fast-food restaurant. You have to assume that’s just as prevalent with restaurants in general. Instagram says that for restaurant goers on mobile, 23% take a photo purely to remember the experience, and 15% share that experience on their social channels. They report that after seeing friends’ photos and videos of fast-food restaurants on Instagram, 66% of frequent diners want to visit.

Interestingly, Instagram users that follow restaurants are 1.4 times more active on Instagram than average, indicating that they use the platform for more than just posting photos. Instagram reports that they like 4.5 times more content, post 3 times more than the average user and comment 7 times more frequently than typical. That’s amazing. One wonders if there is some other common variable other than liking restaurants, but we’ll go with that for now.

Since Instagram was launched food has been a big part of the app, with people posting millions of photos and videos of what they were about to eat. Restaurant have taken note of this posting fetish and thought, what can we do to feed into this without becoming another unwanted ad? That’s where the concept of crave comes in. Restaurants are focusing posts and ads on making people hungry, using Italian music when showing a video of a pizza being made, showing extreme closeups of a Ruby Tuesday hamburger so that people can almost taste it, in the case of Fridays showing a very satisfied person eating their ribs. The point is to focus on the food in order to create the crave.

Instagram says that Ruby Tuesday ran a series of 5 video ads and saw a 22-point lift in ad recall—outperforming similar campaigns by 96%. They say it also drove a 10-point lift in purchase intent among 45-54 year olds—which outperformed nearly 75% of similar campaigns for the same demographic.

“TGI Friday’s developed a two-phased campaign that used video and carousel ads, as well as local awareness ads on Facebook, to promote its ribs and encourage people to enjoy them at a physical location,” noted the Instagram ad team. “The six-week company not only drove a 3-point lift in purchase intent, but more than 50,000 restaurant visits were attributed to the campaign.”

Dairy Queen’s Instagram campaign reach 20 million people, driving an 18 point lift in ad recall among 25-34 year olds. They say it also drove an 8 point lift in awareness of its “Upside Down or Free” promotion and a 3 point lift in purchase intent. Not much in purchase intent but it definitely drove the crave.

“We wanted to build up our presence on Instagram and occupy the currently sparse dessert space,” said Jenell Lammers, Digital Marketing Manager, Dairy Queen (View photo at top). “We’ve done just that with this campaign, which further proved that Instagram is not only great for organic posts but can really drive results.”

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January 26th 2017 Marketing, Social Media

What Marketers Can Expect From LinkedIn in 2017

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With the backing of Microsoft, LinkedIn has big plans to increase its effectiveness for marketers in 2017. Russ Glass, LinkedIn Marketing Solutions’ Head of Products, was interviewed by LinkedIn Account Executive at Vivek Venugopal:

Venugopal: What about LinkedIn has kept you excited about being here? What gets you up in the morning and into work everyday?

Glass: I think LinkedIn Marketing Solutions specifically. It’s also very exciting because our mission is to be the most effective platform for marketers to reach professionals. It’s one of those issues you can actually accomplish. We’ve got this global network of professionals, this incredible platform that they come to on a frequent basis, that has great content and great information.

We have an opportunity now to take all of those assets and put great capabilities around it for marketers to be successful. Every day we are a little better than we were the day before and I think we are going to continue to see that kind of growth.

Venugopal: Can you tell us a little bit about what marketers can expect to see out of the LMS platform in 2017 and talk a little bit about the Microsoft acquisition and how that might impact the roadmap?

Glass: I could talk a long time about what we’re doing next year and all the opportunities with Microsoft, but maybe I’ll focus on the most important stuff, the stuff I’m most excited about. The first half of 2017 we will launch more product than the entirety of 2016.

We’re focused on a couple of key areas, the first of which is data. How do we allow marketers to bring their own data to LinkedIn so that they are targeting audiences more effectively and then combine that with LinkedIn datasets in order to do things you just can’t do on any other platform? Such as bring their own email data, bring their own account lists, connect with their CRM systems, connect with their marketing automation systems and use website pixels so they can retarget visitors on the LinkedIn platform. Then layer LinkedIn’s unique understanding of a professional and who they are in their business life so that you can get in front of exactly the right audiences and you can put content in front of exactly right audiences.

The second big area is reporting and analytics. We have a ton of analytics and reporting efforts that we’re going to start rolling out early next year including website audience analytics and conversion tracking, which we started to roll out and will continue to iterate on.

The third big area is return on investment. How do we help marketers, particularly lead-gen marketers, that are trying to convert our members into the buyer’s or download case studies or register for events. How do we let them do that more effectively? We’re launching products like our lead-gen form product where without leaving LinkedIn and without having to go to a landing page a user can submit their LinkedIn profile information to a marketer. It goes right into their CRM system and right into their marketing automation system. It’s an incredible product particularly for the B2B marketer.

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January 17th 2017 B2B, Marketing

2H 2016 Quick Links, Part 10 (Marketing, Uber, Airbnb, Taxes & More)

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Marketing/Advertising

* Danny Sullivan: Facebook’s racial targeting isn’t new, bad or always illegal despite renewed attention

* In re Sling Media Slingbox Advertising Litigation (SDNY Aug. 12, 2016). Sling isn’t liable to consumers for adding its own ads to recorded videos without telling buyers that would happen.

* AdWeek: AdBlock Plus Is Launching a Marketplace for ‘Acceptable’ Ads, but Will It Just Infuriate Everyone? Also, NY Times: Adblock Plus, Created to Protect Users From Ads, Instead Opens the Door

* Digiday: Breitbart declares war on Kellogg’s after brand pulls advertising

* Bloomberg: “With the right guidance, he said, almost anyone could Instagram professionally. To prove it, he made me an offer: He’d help me become an influencer myself.”

* Bloomberg: FTC to Crack Down on Paid Celebrity Posts That Aren’t Clear Ads. Instagrammers, the FTC is COMING FOR YOU. More from TINA.org: EXPOSURE WITHOUT DISCLOSURE: CASHING IN WITH THE KARDASHIANS

* New York Law Journal: Schneiderman Announces More Astroturfing Settlements

* WSJ: Incredulous Judge Tosses Lawsuit Accusing Starbucks of Putting Too Much Ice in Cold Drinks. See Forouzesh v. Starbucks Corp., 2:16-cv-03830-PA-AGR (C.D. Cal. Aug. 19, 2016)

* Wurtzberger v. Kentucky Fried Chicken complaint. Allegations that the KFC “Family Fill Up meal” promotional photos show an overflowing bucket of chicken, while the actual product only contains a half-bucket of chicken. (Raising the obvious: maybe KFC should use a smaller bucket?)

* Amanda Scardamaglia & Angela Daly, Google, Online Search and Consumer Confusion in Australia, (2016) 42(3) International Journal of Law and Information Technology 203:

Australian consumers lack understanding about the operation and origin of the different elements of the Google search results page. They are best able to understand and identify ads, as compared to their understanding and identification of organic results and results from subsidiary services. There is particular confusion in relation to the operation and origin of Google’s Shopping service.

* Search Engine Land: Why are payday loan ads still showing on Google after the ban?

* Maureen K. Ohlhausen, Administrative Litigation at the FTC: Effective Tool for Developing the Law or Rubber Stamp, 10 J. Comp. L. & Econ. 1 (2016)

* CNN: Russian ‘methbot’ fraud steals $180 million in online ads

* TINA.org’s Worst List: 6 Class-Action Settlements That Missed the Mark

* TPW Management, LLC v. Yelp Inc., 2016 WL 6216879 (N.D. Cal. Oct. 25, 2016). No preliminary injunction against Yelp for the phrase “We Know Just the Place”

* In re Lenovo Adware Litigation, 2016 WL 6277245 (N.D. Cal. Oct. 27, 2016). Certifying two classes of buyers (indirect purchasers and CA purchasers) against Lenovo for pre-installing Superfish’s VisualDiscovery software.

* Adweek: How AT&T Benefited From Getting Out of the Way of Content Creators

* Vox: Why most cereal brands are discontinued within 5 years

Uber

* XYZ Two Way Radio Service, Inc. v. Uber Technologies, Inc., 2016 WL 5854224 (E.D.N.Y. Oct. 6, 2016):

No doubt, these statements are intended to convey the impression that Uber takes the safety of its passengers seriously. But they do so in terms that clearly fall within one or more of the accepted definitions of puffery. The overall tone is boastful and self-congratulatory. Many of the statements are couched in aspirational terms—“committed to,” “aim to,” “believe deeply”—that cannot be proven true or false….Others are vague and hyperbolic; if Uber literally set the “strictest safety standards possible” at the outset, it could not “improve them every day.” In sum, the Court concludes that the challenged statements cannot reasonably be understood as specific representations of objective facts.

* The Verge: How Uber secretly investigated its legal foes — and got caught

* NY Times: How Uber Drivers Decide How Long to Work

Airbnb

* MediaPost: Airbnb Drops Challenge To New York Advertising Law:

“Home sharing company Airbnb has dropped its attempt to block a New York state law that imposes fines of up to $7,500 on people who post ads for illegal rentals. Airbnb’s move came after New York State Attorney General Eric Schneiderman agreed that he wouldn’t seek to hold Airbnb liable for violations of the law….”

* NY Times: Airbnb Adopts Rules to Fight Discrimination by Its Hosts

* S.F. Chronicle: As city lowers boom, Airbnb and rivals thrive

* Cracked: 5 Apps That Have Rampant Discrimination Built In

* FTC: The “Sharing” Economy: Issues Facing Platforms, Participants & Regulators

Commerce

* Fortune: The Ugly Unethical Underside of Silicon Valley. Quoting Dave McClure as saying: “You know the saying ‘There’s a fine line between genius and insanity’? There’s probably a fine line between entrepreneurship and criminality.””

* Law.com: After Feds Drop FedEx Case, Watchers Say More Companies Might Gamble on Trials

* NY Times: Amazon Is Quietly Eliminating List Prices

* Bloomberg: Hampton Creek Ran Undercover Project to Buy Up Its Own Vegan Mayo

* NY Times: How Scalpers Make Their Millions With ‘Hamilton’

* Congress enacted the BOTS Act to suppress technological trickery in the distribution of event tickets.

* Rory Van Loo, The Corporation as Courthouse, 33 Yale J. REG. 547 (2016). From the introduction:

Although legal scholars have written thousands of pages about arbitration in recent years, they have largely ignored businesses’ internal processes for resolving consumer disputes.7 Yet these unexamined processes are pushing the bounds of dispute resolution beyond anything seen in courts or arbitration. The result sometimes conflicts with traditional notions of justice. For example, Bank of America recently developed big data software that considers the wealth of family members in deciding how to handle a customer’s request for a fee waiver.8 At the same time, new internal business processes are advancing societal goals in numerous ways, such as by making it ever more possible to obtain low-cost redress that preserves the relationship between the parties. Rolled out over hundreds of millions of disputes each year, the design of companies’ internal processes can influence efficiency, the distribution of wealth, and fairness on a massive scale….

In this largely private order, the corporation plays three key dispute resolution roles. The first is the customer service department handling disputes about its own products….The second main dispute resolution role is largely absent from the literature: when the corporation serves as a judge for disputes between its own consumers and independent, third-party sellers….The corporation plays a third key dispute resolution role as a reputation-based enforcement mechanism….

Taxes

* NY Times: San Francisco Considers Tax on Tech Companies to Pay for Boom’s Downside

* Techdirt: 46 California Cities Join Rush To Impose ‘Netflix Tax’

European Union

* Reuters: “Germany’s Justice Minister says he believes Facebook Inc. should be treated like a media company rather than a technology platform, suggesting he favors moves to make social media groups criminally liable for failing to remove hate speech.”

* NY Times: Europe Presses American Tech Companies to Tackle Hate Speech. Also, Facebook Runs Up Against German Hate Speech Lawsb

* NY Times: Google, Trying to Endear Itself to Europe, Spreads $450 Million Around

* Washington Post: 7 reasons why some Europeans hate the E.U.

Contracts

* Ars Technica: TOS agreements require giving up first born—and users gladly consent

* Wired: The EPA’s Fuel Efficiency Testing May Not Work. Like, at All. Government-mandated disclosures are expensive to produce but are supposed to be justified by being trustworthy for consumers. If they aren’t, that’s bad news for everyone.

* Oddee: 9 Weirdest Tattoo-Related Offers. My 2005 contracts exam and sample answer.

January 15th 2017 Marketing

We Don’t Sell Products, We Sell Change

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“I actually believe that we don’t sell products, we sell change,” says Tiffani Bova, Customer Growth and Transformation Evangelist at Salesforce. Bova was interviewing legendary speaker and author Seth Godin when she made that comment.

“What great marketers and great sales people and great organizations do is only one thing, as Michael Schrage has written about, we make change happen,” responded Godin. “My favorite example of this is Harley Davidson. Harley turns disrespected outsiders into respected insiders. That’s what they do. They make half of their revenue licensing their logo, because the logo, the totum, the uniform is a symbol of the change. You don’t even have to have a motorcycle to be changed by the brand.”

This is the company’s internal marketing positioning statement that illustrates the point that Bova and Godin are making:

The only motorcycle manufacturer
That makes big, loud motorcycles
For macho guys (and “macho wannabes”)
Mostly in the United States
Who want to join a gang of cowboys
In an era of decreasing personal freedom.

Per Inc. Magazine

Godin also talked colorfully about sales, marketing and social media:

“It all comes down to what story does the sales person tell himself when he shows up at work every morning. Trust and awareness are the two key things here. What we want isn’t email, we want me-mail. What we want isn’t to hear about you, we want to hear about us. We want to hear about our dreams, where we are going. Salespeople who get that, who show up at work everyday intent on making that happen, they don’t have a social media problem.”

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January 4th 2017 Marketing