- It is unclear whether Congress and the President will come to agreement and move forward this year on cosmetics and personal care products legislation.
- Rather, activity this year may lay the groundwork for action by the next Congress in 2017.
What Made News?
Last month, the US International Trade Commission issued a decision invalidating a trademark for Converse’s iconic Chuck Taylor sneaker. Although Converse did win some of its claims, the ITC decision overall represents a potentially significant setback for Converse after the company took aggressive action to try to stop the sale of shoes that Converse claimed infringed its rights in the Chuck Taylor design.
What’s New? (The GDPR.)
Fashion and luxury goods companies need to take heed of yet another data protection regulation. This one could substantially impact them if they collect, process, or transfer EU individuals’ personal data, or plan to do so at some point soon. Specifically, the General Data Protection Regulation (GDPR) is the EU’s new data protection law, recently and finally entered into law. It replaces the old EU data protection regime established by the Data Protection Directive (95/46/EC). The GDPR lays out requirements for organizations that process EU residents’ data and generally provides people increased control over their personal data.
In the recent case of International Information Systems Security Certification Consortium v. Security University, LLC, the Second Circuit articulated its test for analyzing nominative fair use claims in trademark infringement cases. While we now know the Second Circuit’s test, the case also highlights a notable circuit split between the Ninth, Second, and Third Circuits regarding nominative fair use. As a result, companies intending to rely on a nominative fair use defense may have varying success depending on the jurisdiction.
Recent reports indicate that advertising fraud is not only increasing but is now being run by groups alongside otherwise legitimate advertising businesses.
Cybersecurity company Check Point recently released a report finding that HummingBad—a known malware that takes over Android devices, generates fraudulent advertising revenue, and installs apps on the infected phones—was developed and is controlled by a group of cybercriminals within Yingmob, an otherwise legitimate advertising analytics business based in Beijing.
Under the federal Fair Labor Standards Act, employers must pay employees overtime based on their “regular rate.” Various states, including California, also follow the FLSA regular rate definitions. For non-exempt employees paid only on an hourly rate, determining the regular rate is easy: It is the hourly rate. However, matters can be tricky when an employer also pays non-exempt employees additional compensation, such as bonuses or commissions. In many cases, additional amounts paid must be included in determining the regular rate. These issues have become more important, as legal claims have increased in alleging the failure to include all amounts required in the regular rate. The failure to determine the regular rate correctly results in an underpayment of overtime, with possible penalties.
Under a proposed EU regulation, online retail companies in Europe may no longer be able to use geo-tracking in online shopping. The European Commission released a draft regulation on May 25, 2016 that proposes the removal of geo-blocking for online shopping, stating that it wants to ensure that consumers seeking to buy products and services in an EU country, be it online or in person, are not discriminated against in terms of access to prices, sales, or payment conditions.
What’s the News
Walgreens recently settled with the state of New York over allegations that the drug retail chain misled consumers with its pricing, including value and clearance prices. According to the New York attorney general’s office, an undercover investigation showed that Walgreens was overcharging customers compared to the prices displayed in print advertising and on-shelf tags. Walgreens agreed to pay $500,000 to settle the dispute and has agreed to review and correct the allegedly misleading pricing practices. This should serve as a reminder to retailers in all industries of the need to exercise care in product pricing, as this area has become a common target for regulators and the plaintiff’s bar.
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