FTC Sued Prevagen Over Representation Of Placebo Results

FTC sued Prevagen

The FTC sued Prevagen’s marketers. Charge: Unsubstantiated marketing. Is the FTC’s claim meritless? Prevagen says yes — and they’re fighting back.

The case serves as a reminder for dietary supplement marketers: Make sure your promotional materials are in line with FTC compliance standards!

Federal Trade Commission (FTC) to Quincy Bioscience (Prevagen Marketers): Your Brain Supplement Marketing Is Misleading!

Who is suing who? The Federal Trade Commission, alongside the New York Attorney General’s office, is suing Quincy Bioscience (“Quincy”) — marketers of Prevagen.

Why is the FTC suing Prevagen’s Marketers? The FTC regularly penalizes companies for promoting questionable findings. But this case is a bit different. The Commission objects to how Quincy presented information, not the veracity of the study from which the information came. Specifically, the FTC condemned Quincy’s failure to disclose allegedly near identical results for both placebo and active participants.

How does Prevagen feel about the lawsuit? Often, companies caught in an FTC web lick wounds, cut losses (and a check), and call it a day. But Quincy is swinging back. The supplement marketer feels the FTC overstepped its bounds and is forcing unfair scientific interpretations down the throats of small businesses.

The Curious Case of the Jellyfish Protein

A jellyfish protein — and active ingredient in Prevagen — calcium researches have used apoaequorin since the 1960s. But newer — arguably fringe — research suggests the substance may enhance memory function.

But, like many touted supplements — (omega-3’s come to mind) — the medical community’s jury is still hanging outside the courtroom. To wit, the American Pharmacists Association summarizes its stance thusly: “Human data on apoaequorin are limited to small, company-sponsored trials that do not meet expected scientific standards.”

Marketing and Science: An Uneasy Partnership

The intersection of science and marketing is riddled with potholes. On one hand, dangerous products shouldn’t land on shelves, which requires a certain amount of oversight. On the other hand, mixing scientific studies with promotional materials can be a messy legal recipe. Why? Because science is not a monolith; a singular idea. Scientists don’t always agree. Which raises the question: Should judges be determining the proper way to present scientific findings?

This suit is unique because the FTC and AG aren’t questioning a study’s veracity, which is the norm in “unsubstantiated claim” cases. Instead, commissioners contend that Quincy failed to present the results adequately; (specifically, the purported near identical results for placebo and dosed participants). To put it another way, the FTC doesn’t think Quincy is providing “reliable evidence of a treatment effect.”

The FTC’s Rule About Scientific Support

You may be wondering: “Why can the FTC sue over certain scientific studies but not others?” And that’s the question Quincy wants people to ask. But is it the right question?

Quincy insists the lawsuit is subjectively rooted, and therefore meritless. In a statement the company argued:

“Quincy has amassed a large body of evidence that Prevagen improves memory and supports healthy brain function. This evidence includes preclinical rat studies, canine studies, human clinical studies, and, most importantly, randomized, double-blind, placebo-controlled human clinical testing. This type of testing has long been acknowledged by both the FTC and the FDA to be the ‘gold standard’ for scientific evidence.

“The FTC does not allege that Quincy’s principal clinical study fails to meet the FTC’s and FDA’s own definition of ‘gold standard,’ nor does the FTC allege that the study was poorly designed or inappropriately conducted, or that it failed to rely on scientifically-validated measures.

“The sole dispute rests on the interpretation and analysis of the data, with the regulators attempting to hold the company to a standard that is unreasonable, scientifically debatable, and legally invalid. Their experts simply disagree with ours over how to interpret the study results. The FTC should not be the arbiter in matters of scientific debate. We are proud of the work we have done to support Prevagen’s effects and believe our large body of evidence clearly satisfies the longstanding standard to support such claims.”

This squabble over semantics may prove to be the crux of the case. Quincy could win by convincingly framing the FTC’s argument as scientific interpretation, as opposed to objective oversight. But is an interpretive variance truly the problem?

Scientific method convention stands: If a control group’s results aren’t statistically different than “activated” participants’, then it’s back to the lab to form a new hypothesis. The FTC will undoubtedly argue something to this effect. But, hey, you never know; a sympathetic judge could see it Quincy’s way.

Lame-Duck FTC Means Ruling Should Be Vacated?

Quincy is also upset that only two commissioners voted on the action. In a statement, the company characterized the suit as “another example of government overreach and regulators extinguishing innovation by imposing arbitrary new rules on small businesses like ours.” Quincy also accused the agency of being “short-staffed and lame-duck.”

FTC Sued Prevagen And They’re Not Backing Down

The FTC and AG are standing firm in their decision. Jessica Rich, an agency director, chastised, “The marketers of Prevagen preyed on the fears of older consumers experiencing age-related memory loss. But one critical thing these marketers forgot is that their claims need to be backed up by real scientific evidence.”

Warning Letter Dates Back To 2012

Was the suit a shock to Quincy? Maybe not. According to reports, the Commission sent the company a warning letter in 2012. Which just goes to show: Don’t assume you’re in the clear if nothing ever came of that FTC caution from years ago.

The FTC Keeps A Close Eye On Dietary Supplement Marketers

The FTC’s Prevagen censure comes as little surprise. Not only are the ads ubiquitous (in certain regions), but they appeal to senior citizens. The AG remonstrated, “It’s particularly unacceptable that this company has targeted vulnerable citizens like seniors in its advertising for a product that costs more than a week’s groceries, but provides none of the health benefits that it claims.”

Yes, The FTC Wins Dietary Supplement Lawsuits – A Lot

This post isn’t a case-merit analysis. It’s still early stages; both sides have reasonable arguments; the devil will be in the litigatory details.

However, as attorneys who work with dietary supplement marketers and keep up-to-date on industry happenings, we wanted to point out a small curiosity in Quincy’s statement. It reads:

“The FTC has already brought three similar cases against three other companies in which the Commission tried to impose its own rigid interpretation of a company’s scientific evidence to prohibit truthful, non-misleading claims. In each case, the FTC lost.”

How did you interpret that statement? Did you walk away thinking the FTC lost every deceptive marketing case involving a nootropic? Not the case. For example, in 2015, the Commission went head-to-head with the folks behind Procera AVH, a product promising to “restore memory loss and improve brain function.” Originally, the court slapped a $150 million judgment on the supplement distributors, but the FTC agreed to a final payout of $1.4 million to satisfy the censure.

We point this out not to question Quincy, but to warn dietary supplement marketers: The FTC does prevail…often. Don’t be complacent when it comes to advertising compliance.

Connect With An FTC Attorney

Being investigated by the FTC? Have questions about advertising and marketing compliance? We’re here to help.

Blacklisting Alibaba: What Does It Mean For Online Sellers?

Picture of Alibaba marketing material to accompany blog post about blacklisting Alibaba
The USTR finally got around to blacklisting Alibaba.

That’s right, Alibaba’s Taobao flea-market boomeranged back onto the U.S. Trade Representative’s Notorious Markets List, a Scarlet-A register of websites and marketplaces accused of cozying up to counterfeiters.

Is the news a shock? Not really. Capitol Hill has been grumbling — loudly — about the site’s perceived piracy problems for years. (Actually, this is the second time Alibaba made the list.)

Alibaba: We Do A Lot To Fight Counterfeiting

Predictably, Alibaba isn’t thrilled. A company president admonished:

“We are far more effective and advanced in [intellectual property rights] protection than when the USTR took us off the list four years ago. The decision ignores the real work Alibaba has done to protect IP rights holders and assist law enforcement to bring counterfeiters to justice.”

Last year, Alibaba did expand anti-counterfeit efforts. And as it happens, because of those efforts, people are questioning this latest development (which we’ll get to below). But, according to the USTR, the company hasn’t done enough, explaining:

“While recent steps set positive expectations for the future, current levels of reported counterfeiting and piracy are unacceptably high.”

Will Alibaba’s Spot on the Notorious Markets List Affect Online Sellers?

So, what does “blacklisting Alibaba” mean for FBA and other online sellers? Very little, actually.

Yes, the Notorious Markets List is a government production — and we use the word “production” purposefully, because it’s really just a political theater prop; listed parties don’t suffer sanctions. Essentially, the Notorious Markets List is the USTR’s version of Santa’s naughty list.

That said, it is a reputation blow. If customers grow leery of regional products, it could effect folks who manufacturer products in China, or buy from Alibaba vendors.

Blacklisting Alibaba: Fair or Shortsighted?

Not everyone is praising the USTR’s decision.

On Forbes.com, Michael Zakkour explained why the decision might have been wrong.

He reasons:

While the designation does not carry any official sanction or penalty[,] it does have the effect of muddying the truth about Alibaba’s marketplaces and the important role the company is playing in the evolution of cross-border commerce and the re-imagination of the retail model.

First we must clarify that Alibaba has two major platforms for selling brands to Chinese consumers. Taobao is a platform for individuals and third party companies to sell merchandise on a C2C basis. The company’s B2C marketplace, Tmall, is the platform where global and Chinese brands create flagship stores to sell direct to consumers. Tmall, the more important platform to global retailers and brands, is virtually counterfeit-proof.

Zakkour also outlines his three arguments for why the USTR erred in blacklisting Alibaba.

  1. Online counterfeits are a global scourge that brands from all over the world have to combat on a daily basis.
  2. [Listing Alibaba on the Notorious Markets List is akin to] Cutting off the nose to spite the face.
  3. Alibaba has made a massive and sincere effort to eliminate fakes from Taobao.

Zakkour’s article is worth the read for anybody involved in cross-border e-commerce. For similar news, head to our online retail section.

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Kelly / Warner’s e-commerce law attorneys have assisted hundreds of online businesses — of all sizes — with all manners or Internet retail issues. Get in touch to start solving.

eBay Defamation Case Study: Jeweler v. Buyer

picture of eBay signage to accompany a blog post about eBay defamationThis post is about an eBay defamation case currently making its way through the courts. Our firm, Kelly / Warner, doesn’t represent either side. We do, however, help folks in similar situations.

If you’re here to read about a customer review defamation case, keep scrolling. If you’re struggling with an online reputation issue, Kelly / Warner can help. Get in touch today; let’s start weighing your legal options.

Introductions and self-shout-outs aside, without further ado, we present The Case of the eBay Ring Refund

eBay Defamation Case Study: Unsatisfied Client v. Jeweler

Refund Confusion Results In Legal Tussle

Several months ago, a woman (whom we’ll call “Alice”) bought a ring from an eBay store; she split the purchase between two credit cards.

Unfortunately, Alice decided the ring wasn’t for her and initiated the return process. At first, the jeweler didn’t realize that Alice had used two cards and only refunded one.

That’s when things supposedly took a vengeful turn.

Business Owner Said…

Allegedly, the refund confusion compelled Alice to create a phony Yelp page. But Alice didn’t use her own information. Instead, she purportedly created a fake Yelp page under the jeweler’s name — and for the coup de grâce, littered it with negative reviews, including an accusation of “[stealing] thousands of dollars through this diamond scam.”

Customer Said…

No way, insists Alice, who swears she is not the one. In a statement, Alice shared her side of the story:

“[T]here were two other people involved in this dispute with the eBay seller and they were the ones who posted on Yelp and other online sites. I have email evidence that I did not write any of the comments. The plaintiff’s eBay account was shut down due to her misconduct based on eBay’s investigation.”

Reviews Lead To Job Insecurity For Plaintiff and Defendant

The jeweler suffered serious setbacks because of the reviews. Customers canceled orders; eBay removed listings; Intuit even canceled her payment processing account.

Alice didn’t fare any better. You see, for the past decade, she reportedly had worked for the Chamber of Commerce, but lost her job soon after this defamation debacle. Her former employer refused to comment on Alice’s departure, but when asked about the situation, she said, “I am considering filing a countersuit for defamation of character leading to loss of income.”

The Difference Between Bad Reviews and Defamatory Reviews

Judging from online discussions, many people seem to think businesses can sue over negative reviews on sites like (but not limited to) Yelp, eBay, Ripoff Report, and Amazon.

Not true.

Free Speech is an American solemnity. Since the Founding Fathers distributed The Federalists Papers, our nation has enjoyed a long and storied history of public criticism. Every person on U.S. soil can shout their opinions from the top of Denali or a digital pedestal.

But we can’t publicly lie about a person or business, to the point of material hardship. Ask yourself: What would you do if a customer or colleague spread rumors about your circumstances or business? Would you shrug it off, citing free speech, even if the fib destroyed your livelihood?

Winning an eBay Defamation Case

How can plaintiffs win online review lawsuits? Every case is different, but at the very least, claimants must convince a judge or jury that the defendants:

  • Made false statements of fact, which caused material harm to befall the plaintiffs; and
  • Acted negligently — or with actual malice — in publishing or broadcasting the declaration.

Considering An eBay Defamation Lawsuit?

Are you weathering a reputation storm? Wondering whether or not you can sue for defamation? Our team regularly assists people overcome reputation challenges.

Get in touch to talk about your situation.

Online Trade Libel Attorney Gets Facebook Defamation Ruling Reversed

Picture of blackboard featuring the word Trust to accompany blog post about online trade libel caseTo his client’s relief, online trade libel attorney Dan Warner convinced an Arizona appeals court to vacate a trial court’s ruling in a Facebook defamation case. By successfully arguing that the presiding judge failed to properly apply the appropriate legal tests established in Mobilisa, Inc. v. Doe, Warner was able to slip his client from the defamation liability noose.

About the Case: Business Criticism On Facebook Leads To Online Trade Libel Lawsuit

An online trade libel lawsuit, the Plaintiff (whom we’ll call “Acme”) sued an anonymous user (“John Doe”) for allegedly posting false and defamatory statements about Acme’s product on Facebook.

Since the user posted under an alias, Acme filed a John Doe claim to uncover the real name of the anonymous defendant. After initiating the lawsuit, Acme sent subpoenas to Facebook and Domains by Proxy, in search of information (like an IP address) that would help reveal the identity of the product-critiquing user.

Upon receiving the subpoena, Facebook notified John Doe; Doe then retained online trade libel attorney Dan Warner who filed a motion to quash the subpoenas.

Online Trade Libel Catch-22: Preserving Privacy v. Accountability

Online service providers avoid passing out user data like Gremlins avoid bright lights. Why? Because online privacy is a legal quagmire, and if they’re not careful, ISPs can unwittingly find themselves dragged into users’ legal battles. Thus, to avoid unnecessary, resource draining, litigation entanglements, most websites adopt a hands-off approach when faced with civil information requests.

In some cases, however, ISPs are legally compelled to release user data, by force of a court order.  However, in Arizona, to secure a subpoena that forces websites to hand over identifying information on anonymous Internet speakers, plaintiffs must show that:

  • The speaker has been given adequate and a reasonable opportunity to respond to the discovery request;
  • The plaintiff’s action could survive a summary judgment on elements, irrespective of the speaker’s identity; and
  • The balance of the parties competing interests favors disclosure.

Unfortunately, in Acme’s case, the trial court judge denied the motion without making any findings of fact — or conclusions of law — regarding the required three-part Mobilisa test.

Warner’s appeal included several points on which the appellate court could have hung a reversal, but it chose to focus on the trial judge’s failure to adequately apply the “balancing” test, as outlined in Mobilisa.

The appeals court, in Warner’s client’s case, expressly held:

Because of the conclusory nature of the order below, we are unable to tell if the trial court correctly used the 3-part test outlined in Mobilisa v.  Doe, 217 Ariz.  103, 170  P.3d  712 (App.  2007) (using  a  summary  judgment  standard)  or  the  lower  prima facie standard urged by Dream Steam below with their citation to Best W. Int’l Inc., v. Doe, WL 2091695 (D. Ariz. July 2007). See Chaparral DIVISION ONE FILED:  RUTH A. WILLINGHAM, CLERKBY: 6/27/2016 RB Dev. v. RMED Int’l, Inc., 170  Ariz.  309, 311, n.3,  823  P.2d  1317, 1319  (App.  1991) (citation  omitted)  (conclusory  rulings  impair effective  appellate  review).    We  are  likewise  unable  to  discern whether  the  trial  court  engaged  in Mobilisa’s third-prong  balancing test when considering whether the disclosure of Doe’s name outweighed the community’s protected interest in supporting anonymous speech on the internet.

In other words, the court of appeals ruled that it was unclear if the trial court judge considered whether the plaintiff’s business interests outweighed the defendant’s right to anonymously express opinions on the Internet.

Consult With An Experienced Online Trade Libel Lawyer

In today’s digital, viral marketplace, a pristine reputation is crucial to maintaining a competitive edge; protecting your business’ good name is arguably as important as securing seed money.

If you’re fighting a product or business disparagement headache, get in touch with our team of online defamation fixers. We can help.

To learn more about online trade libel lawyer Dan Warner, head here.

Supplement Marketers: Are You Crossing The Language Compliance Line?

picture of apple filled with dietary supplements to accompany blog post about supplement marketersLegal advice for supplement marketers: Be careful wording promotional materials. Strict rules apply. Breaking them could cost you millions.

FDA Takes Notice Of Trade Show Marketing Materials

Picture it (TM Sophia Petrillo). March 2016; the Natural Products Expo West Center [wavy lines transport us to a flashback]…

Health enthusiasts buzzed round the nutraceutical carnival; aromatherapy dominated olfactory senses, and a Washington State supplement brand charmed marketing materials into recycled tote bags.

Several weeks later, the material found its way to the FDA, who in turn issued a stern warning about “non-compliant disease claims.”

What Phrases Should Supplement Marketers Double Check?

So, with what wording did the FDA take issue? Here’s a list:

  • “…used in herbal medicine to help slow the progression of disorders for the eye…”
  • “…lowers blood pressure in hypertensive individuals…”
  • “…lower cholesterol levels…”
  • “…protects against cardiovascular diseases…”
  • “…slow the progression of diabetic and hypertensive retinopathy…”
  • “…protect against development of cancerous prostate cell lines…”
  • “…clinically effective in treatment of alcoholic cirrhosis…”
  • “Clinically improves cognitive function [for Alzheimer’s, vascular or mixed dementia patients].”

Are the above expressions always out of bounds? No. It’s important to understand that context is key.

Play it safe by having a marketing lawyer review your advertising materials before launching a campaign — everything from your website to trade show pass outs.

Interested in other marketing legal issues? Jump this way.

Are you a supplement marketer in need of a compliance review? Get in touch.

Source

Luxury Counterfeit Law: Kering v. Alibaba

luxury counterfeit lawsuitAlibaba.com and a behemoth fashion company are entangled in a luxury counterfeit lawsuit. Let’s take a look.

The Cast: A Luxury Brand to Rule Them All v. Online Retail Giant

Before we get to the lawsuit, let’s establish the players.

Kering

Kering is a huge fashion holding company for sport and luxury brands like Yves Saint Lauren, Gucci, McQueen, Brioni, and Puma. (Fun Fact: Kering’s CEO, François-Henri Pinault, is married to actress Salma Hayek.)

Alibaba.com

Alibaba.com (at the time of writing) is the #2 tech company in China and a major online retail hub. Almost everybody in the product marketing industry interacts with Alibaba.com in some capacity. Like Amazon.com, Alibaba.com is an expanding Borg-like force.

Kering v. Alibaba.com: The Clash of The Retailers

Product Marketing Legal Overview

Let’s be blunt: More often than not, especially lately, items bearing luxury tags are made in China. Why? You know the answer: cheaper labor. “Then how come luxury items cost so much?” Again, you know the answer: brand status is commerce’s co-pilot. “So, then, where does all that luxury money go if not to the people making the products?” Bingo! Back to the luxury companies who are  trading mostly in marketing, not manufacturing.

A retail revolution Is afoot: Asian factories are growing frustrated with the disparity. After all, who appreciates doing most of the work and reaping the least amount of profits? Nobody. So, Chinese manufacturers began a “Quality Made in China” initiative in an attempt to bypass luxury marketing middlemen, like Kering. Let’s put it this way: if “Made in the USA” is about patriotism, the Chinese effort is about globalism.

Luxury Counterfeit Law Claim

So, back to the lawsuit.

In an attempt to knockout knockoffs, Kering sued Alibaba, claiming various intellectual property infringements and — rather dramatically — racketeering.

Racketeering, you ask? Here’s the argument: Alibaba allegedly collaborated with fourteen counterfeiters, by allowing vendors to sell phony products on its site, over an extended period, to deliberately cheat Kering of profits.

Alibaba insists the claims are baseless. So much so that Jack Ma, the online retailer’s founder, vowed to lose in court rather than settle. Why isn’t Ma compromising? Only he knows; but to wager a guess, it’s probably because a settlement would thrust Alibaba into an extremely vulnerable cash flow position — which could also effect U.S. online retail companies. Moreover, a racketeering conviction, in a case like this, has the power to hamstring the global market — top to bottom.

Judge Shuts Down Luxury Goods Racketeering Claim

Theoretically, the racketeering assertion is plausible; but is it practical? No way. Why? It could crush the multi-billion online retail industry — and jump-start another global recession.

The presiding judge did side-eye the racketeering claim, and ultimately dismissed the charge, explaining:

“[M]erchants weren’t aware of each other or were in intentional cahoots w/ Alibaba, required by U.S. racketeering laws. […] The fraud perpetrated by each merchant defendant could be accomplished without any assistance from any other merchant defendant.”

The Case Is Not Over: Yes, in this luxury counterfeit law case, the judged axed a racketeering charge — but the intellectual property claims persist; Jack Ma and co. aren’t out of the woods just yet.

An Attorney Who Understands Luxury Counterfeit Law

Need help sorting an Internet business issue? If so, get in touch.

Board of Directors Defamation: Sued Over Accusations Slung At Meetings?

Board of Directors Defamation
Board of Directors Defamation: Can you sue a BOD member over accusations made at a private meeting?

Board of directors meetings can turn into verbal UFC matches — which is why they’re a regular source of slander and libel lawsuits.

But here’s the legal rub: in many situations, BOD showdowns are protected from the go-go-Gadget arm of U.S. defamation law – thanks to a legal concept known as privilege.

Privilege Affects Many Defamation Lawsuits

What’s privilege, legally speaking? No, it doesn’t mean “legal advantage, rich folks.” In legal terms, “privilege” describes a protected relationship. Doctors and patients, attorneys and clients, spouses – they all enjoy a certain amount of “privilege,” meaning that particular aspects of their conversations, between each other, are not subject to defamation law. Same goes for certain board of directors meetings.

Why are some BOD gatherings legally protected? Because organizations, businesses, and groups need to be able to discuss suspicions, rumors, and other unpleasantries. Doing so is part of how healthy establishments maintain good public reputations and keep their respective management engines chugging along.

The Incident: Accusations Fly at a BOD Meeting

Here’s an example of a recent defamation lawsuit involving a BOD meeting.

  • A sport’s club, with volunteer participants, fought through two heated board of directors’ meetings.
  • At the first, one of the members accused another member of filching funds.
  • At the second, the accused demanded an apology – which never came.
  • Ultimately, records proved the accusation inaccurate.
  • The accused party filed a defamation lawsuit against its accuser.

What Plaintiffs Must Prove To Win A Defamation Lawsuit

To win a slander or libel lawsuit, plaintiffs typically have to prove a lot more than a simple untruth. At the very least, claimants must convince a judge or jury that the defendant:

  • Made a false statement of fact about the plaintiff;
  • Acted negligently, recklessly, or with actual malice; and
  • Caused harm – material or reputational – via the contested statement.

Applying the Standards to this Board of Directors Defamation Case

If reports are accurate – and there aren’t any unknown extenuating circumstances – the plaintiff may win this board of directors’ defamation case. Publicly and falsely calling someone a thief is inherently harmful to a reputation. It’s considered “defamation per se” in some jurisdictions. And in per se cases, the plaintiff usually doesn’t have to prove harm.

BUT! Privilege May Save the BOD

As stated, legally speaking, privileged statements are “protected” statements. Speech that falls under the “privilege umbrella” may not be defamatory – even if inaccurate. Absolutely privileged statements are sometimes 100% immune from legal action. When language is labeled as “qualified privilege,” to win, the plaintiff must meet a higher standard of proof.

In this case, the board of directors’ meeting may be considered a “privileged meeting.” If it is, the plaintiff may not be able to win any damages.

A Common Misconception about Defamation

Over the past decade, “slander” has assumed a colloquial meaning, in addition to the legal one. It’s common for people to say a negative comment is “slanderous.” But as discussed above, actual slander involves more than a negative opinion.

Contact a Defamation Attorney

Free speech is a cornerstone of American life. However, you can’t maliciously lie about another party. Doing so is defamatory, and legal remedies are available to people on the receiving end.

Our attorneys handle all manners of slander and libel lawsuits – both online and off, personal and business-related.

We’re a full-service, boutique practice offering better-than-big-firm results for a fraction of the price.

 

Texas Defamation Roundup: A Topix Scandal & A Sports Showdown

Texas defamation news and lawyer contact information
Texas Defamation News Update

Maybe it’s old fashioned pride or perhaps Texans enjoy a spot of gossip. Regardless, the Lone Star State is birthplace to many defamation lawsuits.

In this blog post, we’ll review a pair of reputation-related cases grabbing headlines in Texas. If you’re ready to speak with a Texas defamation attorney about getting your name removed from a website or litigating against an adversary for posting defamatory statements online, contact Kelly / Warner Law.

Businessman Sues for Online Defamation over Weather Reporter Scandal

Some years back, in Lubbock Texas, a local TV weather woman, Nikki Dee Ray, became entangled in a bit of a selfie scandal. Immodest pics, of what allegedly appeared to be her, were splashed across the Internet. An anonymous leaker had posted the goods on Topix.com, and another unknown person linked local businessman, Chet Pharies, to the scandal.

Pharies sued the anonymous poster (“John Doe”) for online defamation because he felt “his [Pharies’] moral character, in both his private, married life and as a business owner” were being disparaged.

Since the leaker’s real name is unknown, Pharies first secured a court order compelling “John Doe’s” ISP to hand over identifying information. The presiding judge told Suddenlink Communications to give Pharies data that will help unearth the user who linked him to the scandal.

As for Nikki Dee Ray? Well, she left Lubbock a few months back. No word, yet, if she’ll be involved in the suit.

Source

Texas Football Coach Denied Defamation Trial

For several years, former Texas Tech football coach Mike Leach and former ESPN broadcaster Craig James have been entangled in a feud. Call it a typical parent-coach dispute.

The sportscaster’s son, Adam James, played at Texas Tech under Leach and suffered a concussion during his tenure on the team. According to media reports, a doctor allegedly told Adams to sit out a few practices because of a concussion; Leach allegedly punished Adams by making him stand in a dark room during said practices.

At Leach’s insistence, Pincock shared that statement with James. Then he led him off the field to a shed that housed blocking dummies, watercoolers, an ice machine and an ATV. Injured players would sometimes go there to ride a stationary bike. Virtually spotless, the brand-new structure had a tacky, rubberlike floor and an overhead, garage-style pull-down door, as well as a man door on the side. There were overhead lights but no windows. Aided by freshman student-trainer Jordan Williams, Pincock removed anything that James could sit on and made sure the lights were off. He told James that Leach wanted him to remain standing in the dark for the duration of practice. From: http://www.si.com/college-football/2013/09/09/system-leach-excerpt

The situation mushroomed. To shorten a long story, Texas Tech brass asked Leach to leave the football team. Since Leach’s termination was a high-profile sports story, ESPN reported on the event.

In opposition to his termination, and related reporting, Leach filed lawsuits against various parties – including Craig James and ESPN. For what? According to Leach’s lawsuit, Craig James allegedly provided inaccurate information, regarding the incident with his son, to the media outlet.

But so far, Texas judicial officials seem to think little of Leach’s slander case. The trial court and 7th Texas Court of Appeals both dismissed the coach’s action. Furthering, the Texas Supreme Court also denied the case, which pretty much seals its fate. Sure, Team Leach could file another appeal, but it is unlikely.

Source

Questions for a Texas Defamation Lawyer?

Kelly / Warner supports Texans and Texas-based businesses dealing with defamation and trade libel issues. We help individuals get defamatory information removed from websites, and also work with companies being targeted by overly aggressive competitors.

Contact us to start asking your online reputation legal questions.

Cybersquatting Cases and Lawyer Contact

cybersquatting cases
Cybersquatting Cases Round Up

You can’t hold famous domains hostage for cash. That get-rich-quick scheme left the station in 1999 when Congress “yea’d” the Anticybersquatting Consumer Protection Act into law.

Below are two summaries of recent cybersquatting cases. If you have questions for a domain dispute lawyer, head here.

Wiz Khalifa Won A Cybersquatting Lawsuit

Domain marketer Anthony Lynch recently found himself in a legal tangle with Cameron Thomaz – a.k.a., Wiz Khalifa. Lynch scooped up eight domain names featuring the rapper’s trademarks.

Since Khalifa’s claim was straightforward, only one UDRP panelist sat for the case, who ruled in favor of the musician. Why? Because Khalifa used and registered the trademarks before Lynch purchased the domain names. The panelist also pontificated that Lynch probably bought the URLS with the “express intention to target” Wiz Khalifa.

The final verdict: all eight domains need to be transferred back to Wiz Khalifa’s company, at no cost to him.

Case: Thomaz et al v. Lynch, No. D2015-0166

Amazon.com and Kellogg: High Profile Cybersquatting Cases

Amazon.com and Kellogg Inc. can both add cybersquatting lawsuit victor to their virtual trophy cases.

After a protracted dispute, the Internet’s largest online retailer won back amazonprom.com, amazonpromdresses.com and amazondresses.org. The panelists ultimately ruled in favor of Amazon because the defendant lacked a legitimate interest in domains that included Amazon’s trademark.

All you cereal enthusiasts out there, you’ll be happy to learn that Kellogg’s won back kelloggs.buzz – for the same reasons Amazon won.

“Bad Faith Intent to Profit”

Both parties won their cybersquatting claims because the defendant demonstrated a “bad faith intent to profit”. Plus, the names under review were “confusingly similar” to trademarked brands.

Cybersquatting is still a big legal issue. Though federal officials passed the Anticybersquatting Consumer Protection Act, people still run typosquatting and cybersquatting schemes. But there are ways for trademark holders to regain control of their domains.

Speak To A Lawyer Who Has Dealt With Cybersquatting Cases

Kelly / Warner helps trademark holders regain control of domains. An Internet law firm with a cybersquatting law division, we know all the ins-and-outs to reclaim your domain promptly.

Contact us to take back your URL.

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Are Fake Review Websites Legal? Can Affiliates Use Them? (Plus 5 Marketing Rules)

fake review websites are illegal
Are you responsible for the actions of affiliates that market your products or business?

“I can use fake review websites; everyone else does it, so can I!”

A bit of advice: Re-think your promotional pride, because using phony review sites — or allowing your affiliates to use them — could land you on Skid Row. (OK, that’s overly dramatic. But using fake review websites can get you into expensive trouble with the FTC.)

FTC Busts Weight-Loss Company for Not Following Marketing Guidelines

The Federal Trade Commission busted a pair of diet pill brands – Sale Slash and Purists Choice – for not adhering to promotional guidelines laid out in the Lanham Act and Dot Com Disclosures.

Merchants of “organic” weight-loss supplements, Sale Slash and Purists Choice, sold things like Pure Garcinia Cambogia, Premium Green Coffee, Premium White Kidney Bean Extract, Pure Forskolin Extract, and Pure Caralluma Fimbriata Extract.

If You Know Affiliates Are Using Fake Review Websites, You’re Responsible for Their Actions

The FTC believes that both companies knowingly worked with:

  • Illegal SPAM-sending,
  • Fake news site-having,
  • Black hat-wearing,
  • Phony-celebrity endorsing,
  • Bogus-reviewing

affiliate marketers!

Here’s the #1 rule you must remember about using affiliate marketers: If you hire affiliates, and you make them sign a contract that says you can fire them at any time – then you’re also responsible for how said affiliates market and promote your products. Full stop; bottom line; do not pass go. One more time: Businesses are responsible for their affiliate marketers’ promotional actions.

Once The FTC Uncovers Credible Evidence of Marketing Deception, the Suits Take Over

The FTC investigation of Sale Slash and Purists Choice is underway; evidence against them has been compiled, and a judge green lit a motion that will effectively halt distribution and marketing of the products under dispute.

Moving forward, both companies’ assets will probably be frozen and a temporary receiver appointed if violations are definitively uncovered. After all, funds need to be ready for consumer refunds.

The 5 Basic Rules for Online Marketing

  1. If an ad, article, graphic, post, pin, tweet, or gram is an advertisement or sponsorship, label it as such.
  2. If you pay, or otherwise materially compensate, tweeters to promote a product or service, their posts must use an #ad or #sponsored hashtag in the promotional tweet or social media post.
  3. Don’t lie or make false scientific claims. Doing so is a one-way ticket to a giant FTC fine that could put you out of business.
  4. Disclose everything. If you’re signing people up for anything, let them know all of the stipulations beforehand so they can make an informed decision. If you’re billing people monthly, let them know. If you paid for your testimonials and reviews, put it out there. The FTC is serious about disclosures. As such, it’s a good idea to cozy up with the Dot Com Disclosures to make sure you’re operating on the right side of the marketing law. Questions? Get advice from an online marketing attorney.
  5. Fake news and review sites – that don’t feature clear and conspicuous disclosures – are against the law. And the FTC is on the lookout for marketers still using fake news sites. If you don’t want to end up in a legal tangle, don’t use them.

Online marketing lawyers can save businesses time, money – and FTC headaches. Get in touch with Kelly / Warner. Our attorneys can answer your online marketing questions. We’ll resolve your issues quickly — and for a fraction of the price.

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Can You Be Prosecuted For “Inappropriate” Things You Say Online?

can you be prosecuted for things you say online?
Can you be prosecuted for things you say online?

Do you treat Google as a confessional or a digital counter spy? If someone stumbled upon your private searches, would they think: “Dear Authorities: I have convincing proof that the hybrid of Patrick Bateman and Omen Damien now walks among us. Can you get on that, quickly? K? Thanks. Signed, Everyone Ever.”

In our digital world, where is line between “deviant fantasy” and “attempted criminality”? A post-modern meditation on free speech and individual freedom, HBO’s new documentary, Thought Crimes: The Case of the Cannibal Cop, forces each of us to consider our relationship with the swami search engine, Google. The film begs us to debate questions like:

  1. Should online searches be a factor in harassment and other criminal cases?
  2. Can you be prosecuted for things you say online?
  3. Can you be prosecuted for things you say on a “fantasy forum”?
  4. Is there a right answer?

Thought Crimes: The Case of the Cannibal Cop: A Summary

OMGWTF!

HBO (now also known as: high-brow Court TV) debuted another true crime documentary that will leave you disturbed for days. Entitled Thought Crimes: The Case of the Cannibal Cop, the film lures you into the world of Gilberto Valle, a cop-turned-convict whose “fantasies” veered in the yikes-omgwtf direction.

Bottom Line: Gilberto Valle was a New York State police officer who spent off duty time trolling the darkest parts of the Web. Parts where men talked about kidnapping, raping, and then eating women. Yes, Valle was allegedly an active member of a purported online cannibal community.

When Online Talk Starts Getting Real

Eventually, Valle started chatting with another user; talked turned to taking their fantasies AFK. Around this time, Valle allegedly accessed a police database to gather personal information about a woman he mentioned in his “cannibal chat community.” Obviously, this was a big no no.

Investigation & Arrest

In time, Valle’s wife uncovered his secret; she ran to authorities. Law enforcement investigated, unearthed Valle’s online cannibal activity, and discovered his questionable access of police records.

In 2013, police arrested Valle. A jury found him guilty of kidnapping conspiracy; he served a year behind bars; then, a judge overturned the guilty verdict.

Can You Be Prosecuted For Things You Say Online?

Sure, the film is a bit salacious, snarky, and sometimes cringe-worthy, but Thought Crimes is more than mindless true crime fodder. It’s a brain teaser that delves into the philosophical and legal quagmire stewed by the 21st century. Should online searches ever be admissible evidence? What level of criminal intention can a Google search legally convey?

Throughout the documentary, Valle’s mindset is poked and probed – by the filmmakers and us, the audience. The film juxtaposes his conversations about cannibalism with videos of him eating or cooking. We jump to conclusions, only to have those suppositions questioned a frame later. We waiver between two poles: Were Valle’s actions simply, as he insists, an online-only “sick fantasy”? Or did the prosecutors have it right, and use next-level police work to stop a violent criminal before he took his “sick fantasies” to actual streets?

A Minority Report Warning?

In retrospect, perhaps the only message Thought Crimes makes clear it is this:

Be careful what you search for online. Very careful. Because Phillip K. Dick’s prescient Minority Report seems to be playing out right before our very eyes — and “PreCrime” seems to be a real thing.

Kelly / Warner: The Digital Communication Litigation

Kelly / Warner is an internet law firm with a team of attorneys that concentrates on legalities affecting digital communications. To learn more about our firm, please head here. If you’re primarily interested in our online speech litigation practice, please go here.

Got any other questions like, “can you be prosecuted for things you say online?” Give us a ring or send a message.

Finance Analyst Awarded Millions In Professional Defamation Ruling

professional defamation case study
A young banker is several million dollars in the green thanks to a favorable defamation ruling.

A finance broker sued colleagues for professional defamation and won millions of dollars in damages. The reputation-related case serves as a cautionary tale against workplace gossiping.

Meet Svetlana Lokhova: Finance Prodigy & Reputation Attack Victim

With a history degree in hand, Svetlana Lokhova – a Cambridge University grad – eschewed ruins for rubles and took a job with a big-money brokerage firm, Sberbank CIB.

Moving On Up The Corporate Ladder

Go-getter Lokhova quickly climbed the Sberbank rungs; in short order, she was, as they say, “making bank.” But Lokhova’s meteoric rise was not without turbulence. According to reports, she locked horns with colleagues over insider trading allegations, and eventually opted to alert authorities about the indiscretions.

Whistleblowing

In the whistleblowing wake, things at the office became untenable for the academic-turned-banker. According to Lokhova, colleagues attacked her reputation, mercilessly. Hecklers taunted: “Mad Svetlana” and “Miss Dodgy Septum” and “Crazy Miss Cokehead.” The Sberbank bullies even went so far as to label Lokhova a “chemically dependent…b*tch” and “major car crash.”

Workplace Gossip Becomes Brutal

Work became a living nightmare for Lokhova, and the office atmosphere had a “seriously detrimental effect on [her] health.” According to her, the situation also triggered “chronic and long-term symptoms” that drove her to “mental collapse”.

But instead of letting detractors get the better of her, Lokhova fought back with a legal action.

The Central London Employment Tribunal Weighs In On Lokhova’s Professional Defamation Case

Lokhova took her case to the Central London Employment Tribunal (CLET), an official body with authority to rule on certain workplace legal disputes. Preemptively, Lokhova took a drug test – and passed – to prove the addiction accusations false. After reviewing the facts, the CLET sided with Lokhova, awarding her a total of $2.3 million.

Though pleased with the decision, Lokhova lamented that she “could never return to financial services again” because “everybody knows everybody’s business in banking and people believe there is no smoke without fire. My reputation has been shredded.”

Admirably, instead of decrying the tribunal’s ruling, a Sberbank spokesperson vowed that the finance firm is “committed to take on board any lessons to be learned.”

Speak With A Professional Defamation Lawyer

A pioneer in the field of Internet defamation law, Kelly / Warner Law has successfully handled hundreds of reputation-related cases for finance professionals and firms. We pride ourselves on resolving challenges quickly – and in our clients’ favor.

Click here learn more about our trade libel and professional defamation legal practice. If you’re ready to speak with an attorney, contact us.

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