Archive for June, 2010
Endorsements on social networking websites can be a valuable marketing tool for companies. They can also lead to potential liability according to guidelines issued by the Federal Trade Commission (“FTC”). Effective December 1, 2009, the FTC issued revisions to its endorsement guidelines which provide guidance on how to avoid deceptive advertising. Section 5 of the FTC Act (15 U.S.C. 45) prohibits businesses from engaging in unfair or deceptive acts or practices affecting commerce, and the FTC has interpreted this prohibition as covering false and misleading advertising practices. The newly revised guidelines, called the Guides Concerning the Use of Endorsements and Testimonials in Advertising (16 C.F.R. § 255), address the application of Section 5 to the use of endorsements on the Internet and social networking websites, such as Facebook, Twitter, LinkedIn, MySpace, and personal blogs.
Pursuant to Section 5, advertisers are subject to liability for false or unsubstantiated statements made through endorsements, or for the failure to disclose a material connection between themselves and their endorsers. Endorsers also may be liable for statements made in the course of their endorsements. According to the new guidelines, an individual can have a “material connection” with a company not only if he or she is employed by the company whose products or services are discussed, but also if the individual receives free goods, services or special privileges in connection with commenting about a company.
You are a website owner and have just found out that another company has registered a domain name that is nearly identical to your website name. Many of your clients or potential customers are being diverted to this web site when they search for your company’s name on the web in search engines like Google or Yahoo. In fact, it was from one of your customers you found out about this. You believe this party is a “cybersquatter” —that is, the site owner has registered your trademark, or a name similar to it, for the purpose of diverting web traffic away from your site and making a commercial profit to your detriment.
What Can You Do?
Fortunately you are not without options. An organization called the Internet Corporation for Assigned Names and Numbers was charged with administering domain names on a global basis. ICANN, as it is known, in turn authorizes certain arbitral forums to decide domain name disputes. What is an “arbitral forum”? It is an organization that administers arbitrations, which are proceedings for deciding disputes. Some of the more common arbitral forums are WIPO (the World Intellectual Property Organization), based in Switzerland, and NAF (the National Arbitration Forum) here in the U.S.
The Hiring Incentives to Restore Employment (HIRE) Act, enacted March 18, 2010, contains provisions attempting to promote job creation and stabilize the economy. Here are some major provisions which may affect you and your business:
Foreign Account Tax Compliance: In the wake of UBS and the IRS Offshore Voluntary Disclosure Program, the HIRE Act rules have comprehensive measures to reduce offshore noncompliance with new tools which discourage perceived offshore tax abuse. One provision requires an individual with an interest in a specified foreign financial asset to attach a separate disclosure statement to his tax return in any year where that individual’s aggregate value of foreign assets is over $50,000. This statement does not replace the current FBAR (Form TD F 90-22.1) and carries some large penalties for noncompliance.