A dispute that began with an unauthorized burger placed on a menu by a licensee recently culminated in the dismissal of the latest lawsuit between feuding factions of Benihana, the Japanese teppanyaki restaurant chain. In early March, the US District Court in the Southern District of New York dismissed a lawsuit brought by Benihana of Tokyo LLC (BOT) against its American counterpart, Benihana, Inc. (BI) that raised claims of breach of contract and breach of good faith, and highlighted the risks of splitting trademark rights between geographic territories.
Arent Fox’s Fashion Law group was recommended as one of the best retail practices in the country by WWD, which encouraged retailers to call on the firm’s attorneys when faced with issues that threaten their bottom line.
The article focused on the rise of knockoff and infringing fashion products, as issue that is occurring at an alarming rate in 2017. “Every month, shoppers spend billions (yes, billions) of dollars on counterfeit versions of designer goods and with social media’s ability to create a fervor over so many things, fashion chief among them, the knockoff industry is set to keep growing,” reported WWD.
On March 22, 2017, the Supreme Court issued a ruling in Star Athletica, L.L.C. v. Varsity Brands, Inc., et al, No 15-866, clarifying that the Copyright Act protects applied artistic elements appearing on utilitarian objects, including apparel. In a ruling authored by Justice Clarence Thomas, the Court held that: “[a] feature incorporated into the design of a useful article is eligible for copyright protection only if the feature (1) can be perceived as a two- or three- dimensional work of art separate from the useful article, and (2) would qualify as a protectable pictorial, graphic, or sculptural work – either on its own or fixed in some other tangible medium of expression – if it were imagined separately from the useful article into which it is incorporated.”
Gone are the days where a brand's DNA is defined solely by clothing and accessories. With the luxury goods sector experiencing a recent downturn, more and more companies are breaking into the perfume and cosmetic spheres. The movement may be attributed, in part, to the "lipstick index," a phrase coined in 2001 by Leonard Lauder, then-chairman of Estee Lauder, to describe how beauty products may act as affordable indulgences during times of economic recession.
Based on recent federal court filings in the Central District of California, it appears that plaintiff lawyers have found a new way to threaten retailers with class action litigation. In January of this year, two class action complaints were filed on behalf of consumers who allegedly were charged shipping and handling fees “not reasonably related to Defendant’s actual costs of shipping or delivering the items to consumers but instead greatly exceeded those costs.” The complaints assert that the shipping and handling fees violate “established ethical principles” and California law.
The Federal Trade Commission (FTC) has just announced that it will be closing its "Made in USA" investigation of certain Target pillow products. According to the FTC, the outer packaging of the pillow products bore an unqualified "Made in USA" claim while the packages' contents – the pillows themselves – bore a "Made in China" label claim. FTC's investigation began in response to numerous consumer complaints regarding this conflicting origin labeling. In response to the FTC’s investigation, Target agreed to remedy the problem, including removing all affected items from sale, introducing remedial packaging, and, most significantly, agreeing to undertake several longer term "process enhancements" designed to prevent future deceptive "Made in USA" claims.
These longer term enhancements include:
What’s the News?
Before leaving office, President Obama signed into law the Consumer Review Fairness Act of 2016 (CRFA), which protects consumers engaging in consumer reviews. The CRFA voids a contract if it prohibits or restricts an individual from reviewing a seller's goods, services, or conduct.
Who is Affected?
All companies that have the prohibited clauses (see below) in their consumer contracts will have to review and update these contracts for compliance with the CRFA.
What Do You Need to Know?
We’ve compiled some of the things that you ought to know about the CRFA:
The Federal Trade Commission has announced a proposed settlement and consent order in its investigation of a US-based water filtration company, iSpring Water Systems, concerning that company’s representations that its products are "Proudly Built in the USA," which is considered an unqualified "Made in USA" claim that the products were all or virtually all USA-made. These representations appeared on the company’s own websites, as well as those of other online retailers who sold the products. The FTC alleges that many of the company’s products were wholly imported and/or produced with significant foreign inputs, and therefore, the unqualified US-origin claims are false and misleading. While iSpring has neither admitted, nor denied, the allegations, it has agreed to drop the "Made in USA" references, and to make only qualified "Made in USA" claims which clearly and conspicuously identify the extent to which foreign parts, ingredients or processing are utilized.
What’s the News?
Following recent updates, merchants and retailers will soon become subject to the updated Payment Card Information Data Security Standard (PCI DSS), the security standard that organizations need to follow if they handle credit and debit cards from major card companies, such as Visa, MasterCard and American Express. This round of changes will be known as version 3.2 of PCI DSS, and include significant guidance and updates on hot topics such as encryption and strong credentials. Compliance with the changes is important because companies that are subject to PCI DSS but fail to comply face exclusion from processing credit card payments and/or hefty fines. Sometimes, noncompliance could mean leaving open the doors to your cardholder data environment, thereby allowing hackers and malicious entities to enter.
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