Insights

Last week, New York Attorney General Letitia James filed a lawsuit against JBS USA Food Company and JBS USA Food Company Holdings (JBS USA), which together make up the American subsidiary of the world’s largest beef product producer, JBS S.A. The suit alleges that JBS USA engaged in “greenwashing,” misleading consumers about its environmental impact goals. The suit is one amongst many state attorney general lawsuits related to greenwashing or ESG claims, which have spanned across the aisle and been initiated by both Democratic and Republican attorneys general.

On January 11, 2024, the Federal Trade Commission (“FTC”) published in the Federal Register a Notice of Proposed Rulemaking (“NPRM”) to modify the Children’s Online Privacy Protection Rule (“COPPA Rule”), a set of regulations implementing the Children’s Online Privacy Protection Act (“COPPA”) statute. Overall, the NPRM seeks to strengthen and clarify the COPPA Rule in response to technological advances and changes in the way children interact with online offerings. In particular, the NPRM follows a public comment period in which the FTC noted novel issues affecting the COPPA Rule, including the educational technology sector, voice-enabled connected devices, and platforms directed to general audiences that host third-party content directed to children. Comments on the NPRM are due on March 11, 2024.

New considerations have emerged for advertisers who publish reviews or endorsements. On June 29, 2023, the FTC finalized its updated Endorsement Guides, which provide insights to businesses on how the use of reviews and endorsements might be considered unfair or deceptive in violation of Section 5 of the FTC Act. Over the past several months, the FTC sought public comments on proposed updates to the Endorsement Guides to accurately reflect the modern landscape of advertising, which includes reliance on social media and content creators.

On May 18, 2023, the US Supreme Court issued a long-anticipated decision in Andy Warhol Foundation for Visual Arts, Inc. v. Goldsmith, which alters the Courts’ interpretation of the copyright fair use doctrine. Specifically, the Court, in a majority opinion written by Justice Sotomayor, affirmed an earlier Second Circuit decision and held that the “purpose and character” factor of the fair use test does not focus on whether the new work is “transformative.” “[I]nstead, the analysis focuses on whether an allegedly infringing use has a further purpose or different character, which is a matter of degree, and the degree of difference must be weighed against other considerations, like commercialism.”

Earlier this year, Hermès filed a trademark infringement suit against Los Angeles-based designer Mason Rothschild for creating and selling faux-fur digital renditions of the luxury Hermès Birkin handbags and using a collection of 100 NFTs, titled “MetaBirkins,” to authenticate the digital images.[1] In response, Rothschild filed a motion to dismiss Hermès’ trademark infringement claim under the Rogers test on the basis that the digital images of the Birkin bags are “art” and, therefore, receive First Amendment protection.[2]  Hermès opposed, arguing that the Polaroid factors— instead of the Rogers test—should apply, to assess likelihood of confusion.[3]  On May 18, 2022, the court denied Rothschild’s motion to dismiss, concluding that: (1) the Rogers test applies to the trademark infringement analysis of the “MetaBirkins” title, and (2) the Polaroid factors apply to the explicit misleadingness analysis.[4]

The United States Supreme Court has decided to revisit the copyright doctrine of fair use in Andy Warhol Foundation for the Visual Arts, Inc. v. Goldsmith. The case involves a collection of Warhol’s silkscreen prints and pencil illustrations based on Lynn Goldsmith’s copyrighted photograph of the artist Prince. The Warhol illustration was originally commissioned by Vanity Fair magazine in 1984, but Warhol later created his own series of artwork based on the photograph, which Goldsmith argued was an infringement of her copyright. The Warhol Foundation responded by invoking the fair use defense. The Second Circuit decided that the Warhol works did not constitute fair use of the photograph, concluding that all four of the factors in the fair use test favored Goldsmith.[1]

Though many states have either rescinded or allowed their pandemic-related declarations of emergency to expire, state attorneys general are continuing to monitor and enforce against price gouging.

In recent months, the metaverse, a term that is meant to encompass a mixture of virtual reality and augmented reality, has increasingly become a conversation topic for companies and consumers. Companies have begun to invest in this space and have started staking out virtual property on platforms like Decentraland and The Sandbox. Lawsuits and trademark applications have also popped up alongside these investments. This recent legal activity indicates that the metaverse will be a critical area for companies to begin to learn about and monitor to ensure they are adequately protecting their intellectual property and avoiding risk.

At the end of 2021, the California Statewide Commission on Recycling Markets and Curbside Recycling (the “Commission”) sent a letter to The California Department of Resources Recycling and Recovery, also known as CalRecycle, and California Attorney General Rob Bonta, asking them to investigate illegal labeling of plastic bags as recyclable by retailers. The Commission is alleging that businesses in the state are falsely implying that their bags are capable of being recycled through curbside collection with the “chasing arrows” logo and words such as “recyclable” and “recycle.” The Commission believes this labeling is impeding the curbside recycling process.

On May 5, 2021, Facebook’s Oversight Board upheld Facebook’s January 2021 ban of former president Trump from Facebook and Instagram for encouraging violence following the January 6, 2021 U.S. Capitol siege, based on two posts Trump made on Instagram and Facebook that afternoon and evening calling the rioters “great patriots” and “very special.” However, the Board left open the possibility for Trump to return to Facebook, claiming that his indefinite suspension was “standardless” and giving Facebook six months to modify its penalties against Trump proportionately based on its existing platform rules. Facebook had requested the input of the 20-member Board as to whether its decision was correct and sought recommendations on future suspensions of political leader users.

The Consumer Financial Protection Bureau (CFPB) is not wasting any time getting to work to protect consumers. On January 28, 2021, the CFPB’s Acting Director, Dave Uejio, announced that “the CFPB will take aggressive action to ensure that regulated companies follow the law and meet their obligations to assist consumers during the COVID-19 pandemic.” To accomplish this goal, Mr. Uejio directed the CFPB’s enforcement division to accelerate enforcement investigations related to COVID-19. 

New York’s new automatically renewing subscription law is set to take effect on February 9, 2021, 90 days after its signing. When New York Governor Cuomo signed Bill S1475A into law, he joined an increasing number of states which have enacted laws imposing strict demands on automatically renewing and continuous contracts. S1475A resembles California’s famously stringent automatic purchase renewal law, which is known for leading to a multitude of class action lawsuits. In particular, New York’s new law resembles a list of requirements that was added to the 2018 California automatic purchase renewal law.

On November 30, 2020, New York Governor Cuomo signed into law a bill that will allow estates and representatives of deceased individuals to defend their names and likenesses from commercial exploitation, allowing their estates to continue to control and protect their likeness after their death. The new law, which establishes a “Right to Publicity” for deceased individuals who were domiciled in New York at their time of death, allows these individuals to protect their personal characteristics that have commercial value, including their name, picture, voice, or signature, against unauthorized use.

Recently, New York enacted a new law against gendered pricing that was included as a key component of the state’s Fiscal Year 2021 budget and Governor Cuomo’s 2020 Women’s Agenda. In a press release announcing the law, Governor Cuomo states, “By abolishing the pink tax, women and girls will no longer be subject to harmful and unfair price discrimination and any businesses who fail to put an end to this despicable practice will be held accountable.” Other state actors are quoted as lauding the new law and comparing the “pink tax” to gender discrimination against women.

On August 14, 2020, California Attorney General Becerra announced that the Office of Administrative Law approved final regulations under the California Consumer Privacy Act (CCPA). The approved regulations, which became effective immediately, guide businesses and consumers on the CCPA.  The final regulations can be found here.

On August 3, the Federal Circuit reissued its decision in Illumina, Inc. v. Ariosa Diagnostics, Inc., holding that a method of preparing DNA before testing it is patentable even though that method relied on a naturally occurring phenomenon. Here, the Federal Circuit adds more language to clarify its reasoning for determining that the claims are patent-eligible and explains what distinguishes a claim directed to a natural phenomenon from one that merely uses such a phenomenon. It also distinguishes this method of preparation for performing a diagnostic as different from the diagnostic itself (which would not be patent eligible). 

Although COVID-19 is occupying a lot of regulatory resources, Attorneys General are continuing their consumer protection mission, including watching out for deceptive claims related to stem cell therapy and other medical treatments. Attorneys General are particularly concerned about businesses making unsupported claims suggesting their services or procedures can treat or cure disease.

On July 7, 2020, the Maine Attorney General’s Office obtained a victory for consumers in the United States District Court for the District of Maine in the area of broadband privacy law. This ruling, which among other findings held that a Maine statute guarding consumers’ private data from internet service providers is not preempted by federal law, lays the groundwork for other states to potentially enact similar laws in an effort to protect consumers from service providers selling their personal data. Maine Attorney General Aaron Frey applauded the ruling by issuing a statement emphasizing that Maine “has a significant interest in protecting Mainers from practices which may place their personal data at risk.” Attorney General Frey further states that this ruling “is a huge victory for Maine consumers.”  

Now that some businesses are attempting to re-open and must sanitize their locations for employees and the public, Attorneys General will vigilantly monitor for unsupported claims that products can cure or prevent the transmission of COVID-19. They will also watch for claims that a location using these products will be safe for the public. Several Attorneys General have already initiated enforcement actions and issued cease and desist letters admonishing companies who made such representations, and more are sure to follow.

On June 30, 2020, in U.S. Patent and Trademark Office v. Booking.com, the Supreme Court of the United States held 8-1 that “Booking.com” can function as a trademark eligible for federal registration because consumers perceive the term to identify the hotel-reservation services available at that domain name. The Court affirmed the Fourth Circuit holding that the term is not, as the United States Patent and Trademark Office (USPTO) had previously found, “a generic name for online hotel-reservation services.”