Alerts

AD-ttorneys@law – March 5, 2021

Alerts / March 5, 2021

In This Issue:

Sean Combs Opens New Front in War Against GBG Sean John

Accuses majority holder of using election-related trademarks to sell goods

Puffy Prologue

The lawsuit between Sean John Combs (AKA Puff Daddy, AKA P. Diddy, AKA Puffy or AKA Diddy) and Global Brands Group just took on a political dimension.

Combs sued Global Brands Group subsidiary GBG Sean John LLC and related companies in the Southern District of New York for using his likeness without his permission and whipping up fabricated quotes in his name. As a minority shareholder, Combs does help advance the brand — by his own assertion, the rap mogul has no beef against GBG using his name in the GBG Sean John moniker. But the use of his likeness and voice are a different matter.

The first suit alleges that when GBG Sean John launched a new clothing line with women’s clothing retailer Missguided, the two companies used false quotes allegedly attributed to Combs in their marketing efforts but failed to secure his permission.

Less Out There than Kanye

Although the main suit is but freshly filed, Combs added a new wrinkle to the dispute shortly after the first complaint hit the court.

“During his time in the public arena,” his new lawsuit states, “Mr. Combs has become a leading voice in supporting efforts to increase youth and minority participation in local and national electoral politics.” In 2004, he set up a company called Citizen Change and started up the VOTE OR DIE campaign, “a nationwide non-partisan, voter-participation” effort.

And because it couldn’t just be a voter empowerment campaign, there had to be merch — much of it stamped with the VOTE OR DIE tag line that was promoted widely across multiple media outlets on the famous bods of Ellen DeGeneres, Mariah Carey, Paris Hilton, Jay-Z and Ashton Kutcher.

To set up his complaint, Combs makes clear that his original Sean John entity never had any relationship or rights over the Citizen Change organization or the VOTE OR DIE campaign, including its trademarks to the slogan, which was canceled in 2016 for a failure to file documents.

Failure(s) to Re-Launch?

Then, in 2019, GBG Sean John allegedly “filed a trademark application for the mark VOTE OR DIE — the exact same mark as the VOTE OR DIE Mark that was successfully registered by Citizen Change in 2010,” according to the complaint. This despite failing to receive permission from Combs or any of the companies involved with VOTE OR DIE, which were not part of GBG’s purchase of Sean John, and Sean John had not relinquished the trademark in any case.

A tussle ensued over the legitimacy of the trademark application, and Combs accuses the defendants of making false statements in its trademark filing, intended to efface the real difference between them and Combs/Citizen Change. But in September 2020, Combs relaunched the VOTE OR DIE campaign, filing for a brand-new trademark and sponsoring events related to that year’s election.

Perhaps unsurprisingly, GBG Sean John followed suit; its own relaunch, replete with a website hawking VOTE OR DIE merch, was up in October, just in time for one of the most hotly contested elections in history.

The Takeaway

Combs is seeking a minimum of $10 million in damages for breach of contract, unfair competition, common law trademark infringement and deceptive practices under New York State law.

We’re not sure how this new suit will affect the outcome of the main case. But if Combs’ allegations are true, it would appear to present an object lesson in how mere familiarity is a poor defense against the cold, hard facts of corporate ownership.

CBD Oil Company Gets Hit with FDA Double Whammy

CBD products marketed as diet supplements that treat COVID-19?

Trifecta

We’ve covered CBD marketing missteps before, countless times. We’ve discussed the vagaries of diet supplement advertising as well. And, over the past year, we’ve alerted readers to any number of COVID-19-related scams.

But how often does a story that combines all three cross our sights?

The Food and Drug Administration recently fired off a letter to two companies, Evolved Ayurvedic Discoveries Inc. and BioCBDPlus, for a rare triple slam.

For beginners, the companies’ “BioCBD+ Total Body Care” product is labeled as a dietary supplement, and “CBD products are excluded from the dietary supplement definition ….” Okay, we’ve seen that before. But …

“In addition,” the FDA writes, “we observed that your website offers CBD products that are intended to mitigate, prevent, treat, diagnose, or cure COVID-19 in people.” The offending tags include specific coronavirus claims, such as “As COVID-19 spreads around the world, customers are asking us how CBD can help . . . the good news is, a healthy immune system may support you during this pandemic, and CBD is great for immune support.”

More generally, the companies are accused of broader claims regarding viruses as well: “Can CBD Help Stop the Spread of Viruses? [H]aving a strong immune system right now is our best defense, and CBD may help support your immune system’s strength.”

The Takeaway

There are a slew of other alleged claims involving the benefits of CBD for post-traumatic stress disorder, autism, mood disorders, cardiovascular inflammation, Crohns Disease and more.

The products include the “BioCBD+ Total Body Care,” capsules, “BioCBD+ Topical Oil Muscle & Joint Support” oils, and “BioCBD+ Peace Vape,” which we assume has something to do with vaping. The companies have 15 days to get their ducks in a row.

Consumers Rag on Hearst Mags for Subscription Snags

Class action claims seek retribution for auto-renewal sins

In Xanadu

Nearly a century ago, before it became a footnote to the greatest movie ever made, the name Hearst cast a long shadow across the American cultural landscape — forging public opinion, devouring the competition and playing an active role in outcomes of current events.

Today, Hearst Communications, the descendant of William Randolph Hearst’s vast holdings, remains a media juggernaut. Its magazine division, for instance, runs more than two dozen properties, including titles from Cosmopolitan and O, The Oprah Magazine to Inside Soap and Road & Track.

But just as significant is another Hearst subsidiary, CDS, which bills itself as “the leading provider of end-to-end business process outsourcing, managing 200 million consumers for more than 1,000 brands.” When it comes to Hearst’s magazines, CDS manages the properties’ subscriptions, billing, collections and so on — the machinery behind the 45-lb. gloss.

Unlimited Time Only!

These two formidable companies found themselves on the business end of a class action struggle brought by three San Diego residents. They accuse the pair of plaguing them with a negative-option subscription renewal model, through which they were offered a low price for a fixed-term subscription for magazines but (in two of their cases) were subsequently charged for renewal. They claim that the disclosures of the automatic renewal provisions were difficult to find if they were there at all.

The action has been rattling around since 2019, when the plaintiffs filed in San Diego Superior Court. The case is now on its second amended complaint, which was (mostly) given the nod by the Southern District of California.

The Takeaway

The plaintiffs’ false advertising and unfair competition claims survived on the strength of their assertion that the disclosures of the renewal policy were not “clear and conspicuous” as they are required to be under California’s Automatic Renewal Law. As a helpful review, here’s the language the court quoted at length:

“Clear and conspicuous means ‘in larger type than the surrounding text, or in contrasting type, font, or color to the surrounding text of the same size, or set off from the surrounding text of the same size by symbols or other marks, in a manner that clearly calls attention to the language.”’

A handy reminder for everyone out there in the subscription business: You really don’t have to do much to avoid a mess like this. Clear and conspicuous doesn’t demand much from your ad department.

For starters, just change the font color.

Peloton Wants to Set ‘Spinning’ Free

Petitions to cancel Mad Dogg Athletics’ ‘generic’ trademark registrations

A Tribute

Let us doff our hats to the poor brand names that passed on due to genericide — murder by success. Genericide is when a product name becomes so ubiquitous that the owner of the trademark loses its rights to ownership.

For all the aspirins, laundromats, linoleums, kerosenes, yo-yos, TV dinners and, yes, even app stores out there — we speak your name.

Like Tolstoy’s unhappy families, each genericide is unique. Some companies simply forget to trademark their brand, achieve commercial success and then are not allowed to register when they finally get around to doing it. Others simply dominate the market so that their name passes into the vernacular, and their attempts at enforcing the mark fail.

Spinning Scared

Which sets the stage for an interesting challenge filed in mid-February before the Trademark Trial and Appeal Board of the U.S. Patent and Trademark Office (USPTO).

Peloton Interactive, the maker of in-home stationary bikes and treadmills that feature streaming classes, is petitioning the USPTO to cancel the registrations of two trademarks (see here and here) owned by Mad Dogg Athletics, self-described as “the world’s largest equipment-based education company.” We’re not sure what that means, but we do know it includes indoor bicycling equipment, so guess which trademarks this dispute is about.

Notice that we didn’t call Peloton “the spinning class company” or “the spin bike maker”? Both “spinning” and “spin” were registered by Mad Dogg more than 20 years ago, and, according to Peloton’s petitions, its rival likes to “abusively enforce” its rights.

We don’t want to have to hide under our desks.

The Takeaway

Well, if you’ve ever dreamed of using “spin” and “spinning” without fear in your own advertising, Peloton is leading the charge for you.

“With five minutes of simple Google searching, it is easy to see that everyone in the world, other than Mad Dogg, believes that ‘spin’ and ‘spinning’ are generic terms to describe a type of exercise bike and associated in-studio class,” the petitions read.

This is the thrust of the company’s case, which it backs up with examples from a plethora of websites, magazines and internet memes.

Will it work? The duration of Mad Dogg’s ownership of the trademarks in question is significant, and the company has (allegedly) spent a lot of money and effort to defend them.

But spinning has become such a mainstay of fitness culture with a reach and immediate identification similar to that of yoga or Pilates — and the latter’s trademark was ruled generic in the Southern District of New York back in 2000.

Peloton may have a chance.

Check Out Our Latest Blog Posts

PA Supreme Court Finds Intent Is Not Nine-Tenths of the Law

We regularly tell clients that intent is meaningless when it comes to deception under Section 5 of the FTC Act. And that’s true (or we wouldn’t say it). But fewer people realize that it’s not necessarily true when it comes to a minority of the states. As of a couple weeks ago, however, that number has shrunk by one, courtesy of the Pennsylvania Supreme Court. Learn more here.

Virginia Becomes the Second State with a Comprehensive Privacy Law

Governor Ralph Northam has signed the Consumer Data Protection Act (CDPA), making Virginia the second state with a comprehensive privacy law. The CDPA is inspired by both the California Consumer Privacy Act (CCPA) and General Data Protection Regulation and takes effect Jan. 1, 2023 (the same date as most of the provisions of the California Privacy Rights Acvt (CPRA)). Read more here.

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