Fashion Counsel with Anthony V. Lupo

Arent Fox's fashion law blog offers news, analysis, and insights for the industry from fashion attorney Anthony Lupo.

Fashion Counsel with Anthony V. Lupo
Trademark
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Name That Circuit Split: Nominative Fair Use in the Second Circuit

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.

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Advertising, Data Collection & Privacy
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Triple Threat: Chinese Ad Company’s Malware Raises Ad Fraud, Cybersecurity, and Privacy Concerns

What’s New?

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. 
 

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Regulatory, Recall & Prop 65
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California Retailers: Use of Thermal Receipt Paper Gets Costly
  • The first NOV involving register receipts was issued by the Center for Environmental Health against a restaurant in Lake Forest 
  • California retailers appear to have two options: post warning signs in the store or switch to electronic receipts or BPA-free paper
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Labor & Employment
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Employers May Have to Include Pay-in-Lieu of Benefits In Regular Rate for Overtime

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.
 

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E-Commerce, Online Distribution & Fulfillment, Advertising, Data Collection & Privacy
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EU Reg Would Ban Retail Companies From Using Geo-Tracking In Online Shopping

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.
 

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Advertising, Data Collection & Privacy
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Walgreens Settles Pricing Dispute After New York’s Years Long Investigation

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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Labor & Employment
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San Francisco Mandates Employers Provide Paid Parental Leave

California has myriad laws giving employees the ability to take various paid or unpaid leaves. Some cities impose even broader paid sick leave mandates. Now, starting January 1, 2017, larger employers with employees working in San Francisco will have to provide employees with paid parental leave to bond with a new child. On July 1, 2017, the ordinance expands to cover smaller employers.
 
San Francisco’s ordinance is the nation’s first mandate for private employers to provide fully paid parental leave. The law extends to employees who work only part of the time in San Francisco. It also provides new retaliation protections, potentially reaching beyond California law and protecting some paid family leave taken under state law.

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Class Action Defense, Advertising, Data Collection & Privacy
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Retailer Cashes In On Refund Claims for Unredeemed Store Credits

Store credits not redeemable for cash are not unclaimed property under California's Unclaimed Property Law (UPL). In Bed Bath & Beyond Inc. v. Chiang, Case No. 37-2014-12491 (Super Ct. San Diego, Cal. Mar. 4, 2016), the Superior Court issued summary judgment in favor of the national retail chain, Bed Bath & Beyond Inc., holding that merchandise credits not redeemable for cash are not subject to the UPL and also qualify for an exemption under the UPL for gift certificates that do not expire.
 

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Advertising, Data Collection & Privacy
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These Prices are Healthy?!: GNC Sued for Alleged Fake Pricing

What’s the News?

A recent lawsuit filed against GNC serves as a reminder that companies need to ensure that prices listed as “regular prices” are substantiated.

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Intellectual Property, Labor & Employment
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Defend Trade Secrets Act Creates Need to Revise Employee Contracts Governing Use of Trade Secrets and Confidential Information

Fashion companies deal with trade secrets and other confidential information all the time. Whether it is proprietary information regarding customers, pricing, sourcing, product design or manufacturing methods, this valuable intellectual property provides a competitive edge in the market by virtue of the fact that it is not generally known. If you use employment contracts or non-disclosure agreements with your employees restricting their use of the company’s trade secrets or other confidential information (and if you don’t, you really should), then you need to be aware of a provision in the Defend Trade Secrets Act of 2016 (DTSA), which has been passed by the House and Senate and will become the law of the land once the legislation is signed by President Obama.
 

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Arent Fox LLP, founded in 1942, is internationally recognized in core practice areas where business and government intersect. With more than 350 lawyers, the firm provides strategic legal counsel and multidisciplinary solutions to clients that range from Fortune 500 corporations to trade associations. The firm has offices in Los Angeles, New York, San Francisco, and Washington, DC.