Big Brother Has Indeed Been Watching

The FTC has been checking compliance with its e-mail opt-out requirements promulgated under CAN-SPAM, and recently announced the results of a compliance survey it undertook with e-Tailers. The survey indicates that 89 percent of those online merchants who participated in the survey were complying with consumer requests to opt-out of future commercial e-mail. The FTC essentially selected 100 merchants that are big users of the Internet in retail sales and then visited their websites, created test e-mail accounts and registrations, and signed up for promotions—using the retailers systems to prompt both an initial message and their ability to reply with an “opt-out” request. All of the merchants selected did provide clear notice to consumers of their opt-out rights and a relatively easy means to do so. After six weeks of monitoring, about 89 percent of the merchants honored all opt-out requests, with 93 percent honoring some. In case you were thinking the FTC doesn’t take CAN-SPAM enforcement seriously or can’t possibly monitor and track your compliance efforts, think again. Use e-mail/e-Tail advertising and marketing? Need to understand your obligations? Need to develop policies and practices for compliance? How quickly and with what level of accuracy do you honor the requests? Need help in understanding when and to what CAN-SPAM applies? Contact either Joe Rosenbaum or Doug Wood at Rimon. We can help.

Waive Your Right to Jury Trial–California Weighs In

A recent California Supreme Court decision (Grafton Partners v. Pricewaterhouse Coopers) held that the California Constitution prohibits pre-dispute waiver agreements when it comes to jury trials. In other words, jury trial waiver provisions in many commercial and consumer contracts may now be unenforceable in California. The decision indicates that a party may not be able to contractually waive its rights to a jury trial because the California Code of Civil Procedure limited enforceability of jury waiver agreements to only those agreements that were entered into after the filing of a lawsuit, not in advance. This is likely to be appealed. We will keep you posted.

In Memoriam–An Era Comes to an End

Truly marking the end of an era, Jack Kilby and Robert Moog passed away recently. We thought it fitting to honor them, given that their innovations and inventions have transformed our lives, our societies and our global economy in the last 30 years, and are likely to continue to do so for decades to come. Many of you, before reading this, may have never heard their names, but their inventions rank alongside those of Thomas Edison, Alexander Graham Bell and Henry Ford in their impact. Each in his own way, has enriched our lives in ways neither they, nor anyone, could possibly have foreseen. We take a moment to mourn their passing and thank them for their contributions.

On June 20, at the age of 81, Jack Kilby, passed away. Although few people outside the engineering field may know his name, he is credited with the invention of the integrated circuit while working at Texas Instruments—the seemingly simple notion that transistors could be miniaturized onto a block of silicon—about the size of a paper clip back then. Together with Robert Noyce, who figured out how to mass produce them, his invention led the way for a multi-trillion-dollar industry and an information and processing revolution unrivaled in the history of the world. You may recall that Mr. Noyce and Gordon Moore went on to found Intel! Mr. Kilby won the Nobel Prize in Physics in 2000, the Draper Award in engineering, and the National Medal of Science, and has more than 60 patents credited to his name; yet throughout his life, he remained down-to-earth, although proud of his invention. He is credited with noting that “…scientists get the theories. But engineers make them work. And the engineer has the added challenge of cost, because if your solution works but it costs too much, there will never be any application.” Amen.

On Sunday, August 21, Robert Moog passed away at age 71. Although you may also not recognize his name, his synthesizer was well known to musicians around the world. From the Monkees in 1967 and The Beatles in 1969, to RadioHead, The Beastie Boys and Moby today. The Doors, Jan Hammer and Herbie Hancock, Yes, Emerson, Lake and Palmer, The Byrds, The Rolling Stones and even the score of Stanley Kubrik’s classic A Clockwork Orange all used the “Moog Synthesizer.” Moog was awarded the Polar Prize in music for his 1970 invention of the “mini-moog,” won a Grammy for technical merit (he shared that prize with Steve Jobs for the Apple Macintosh), and is generally credited with being the father of electronic musical sound. Oh, and in case you are wondering, those cell phone ringtones, file-sharing MP3s, and yes, even the iPod—with chip-size synthesizers—owe homage to the inventive genius of Mr. Moog—an engineer, inventor and patron saint of Rock and Roll.

Black Forest Group Conference

The Black Forest Group is hosting a high-level conference in Valencia, Spain, in conjunction with its Fall 2005 meeting. The BFG is a non-profit membership association of international end-user information technology and strategic planning senior executives and high-level academic and support professionals, dedicated to providing its members with sustainable competitive value in their professional capabilities and commercial responsibilities. On the Agenda for Valencia: Healthcare Systems in Europe and the U.S. for Global Employers; Record Management Across International Boundaries; Compliance, Security and Privacy—The Changing Role of the CIO/CTO; Global Collaboration, Off-shoring and Outsourcing, and more. For more information about the conference or BFG membership, contact Joe Rosenbaum.

What a Jam(ster!) You’ve Gotten Us Into

Charles Ford has sued Verisign, Jamster!, Jamba! (the European version of Jamster!), T-Mobile USA, AT&T Wireless, and Cingular, hoping to turn his lawsuit into a worldwide class action. The problem: his daughter responded to a TV ad promising her a free ring tone. Although she claims never to have downloaded any songs the company sent her, Ford was billed $1.99, plus another 5 cents for each text message she received and read over her monthly limit—to the tune of $80. Ford is alleging fraud, negligent misrepresentation, false advertising, and unfair competition, and is claiming that by targeting children who often don’t understand, they are using this as a means to keep sending text messages which are read—costing consumers money. Stay tuned.

Fine Tuning Financial Privacy

This June, the Ninth Circuit, overturning a lower court ruling, held that the Fair Credit Reporting Act (FCRA) does preempt some part of the California Financial Information Privacy Act (aka SB1). The court held that the FCRA does, in fact, preempt state affiliate sharing laws insofar as a “consumer report” is concerned. Where affiliate sharing does not involved a “consumer report” as defined in the FCRA, state laws are not preempted. What this means if you do business in California: (a) SB1 opt-out will not apply when affiliates share consumer report information; (b) SB1 opt-out will apply when affiliates share information that isn’t a consumer report; and (c) SB1 “opt-in” relevant to disclosures of information to non-affiliates will continue to be applicable and enforceable.

Data Miners Can’t Market to Minors?

Just last month (June was a busy month), Utah and Michigan laws came into force which prohibit sending commercial e-mail to children for products a minor can’t legally own there—but the children must be signed up in the newly created Child Protection registries to be covered by the protection. That means not just gambling or alcohol, but tobacco, prescription drugs and a host of other items which children are not permitted to own in those states. Michigan and Utah will both impose fines for violations , and in Utah, sending a message or a web link could also land you in jail for up to three years. And you thought CAN-SPAM was tough—in both states, the penalties apply even if a parent requested the e-mail. Although likely to be challenged, at this point, if you are using e-mail or web-based links to market in these states, the time to worry about doing a merge-purge against the registries before you e-mail is now.

Broadband Cable Internet Providers Don’t Have to Play by Common Carrier Rules

We were so busy last month telling you about Grokster, we didn’t even get a chance to mention the Supreme Court also ruled providers of cable modem services are not subject to the common carrier regulations that apply to telecommunications services—most significantly the requirement they allow competitors to connect or interconnect with their networks and provide competitive choice and equal access to consumers. Technically, the decision held that the FCC didn’t exceed its authority and has the discretion to interpret the scope of its regulation and rulemaking authority when it declined to force cable broadband providers to provide competitive access similar to that accorded the telecommunications’ common carriers. The FCC had characterized cable modem services as “information services” and thus not telecommunications services, which are subject to the common carrier (and consequently, competitive) regulations.

Find Everything on Google! Someone Thinks They Don’t Have Enough Warnings

Click Defense, a company that sells tools for online marketing, including tools to prevent click fraud, sued Google. Why? Because it just doesn’t do enough to prevent “click fraud”—the process of deliberately clicking Web ads to run up rival advertising costs (the advertiser has to pay Google for each click). Whether it does or doesn’t do enough is a question of fact and whether it has an obligation to do something, anything, or more than it is doing is also debatable. On one end of the spectrum, liability could attach if a search engine company actually knew (or should have known) someone was doing that and did nothing to stop or prevent it. At the other end is the fact that in today’s environment, it is often difficult for these providers to monitor or determine what constitutes improper or proper clicking. After all, isn’t the goal of advertising to induce you to click? This is a sticky problem that is likely not to go away and will find different paths through the courts—there is too much money at stake. How can we help you?

Who Could Have Known?

Last month we teased you about legal issues that apply to interactive, web-based digital video games. How could we have known those sexually explicit scenes hidden in the game Grand Theft Auto: San Andreas would have been exposed just in time for our July Legal Bytes issue. Wow. Although the Advertising Review Council has an Entertainment Software Rating Board (“ESRB”)—a self-regulatory group that in May 2001 promulgated widely followed and accepted Principles and Guidelines for Responsible Advertising—the inability of the industry to effectively police itself, whether in connection with sexually explicit images, profanity, violence or otherwise, is coming under increasing fire as these incidents are uncovered. You all know what that means, right? Legislation, regulation and full employment for advertising attorneys who know their way around interactive, web-based digital gaming…and we have lots of those folks. You thought we were only concerned with product placement. Questions?