Another One Bites the Dust: You Might Be Your Brother Employer’s Keeper (Again)

The U.S. Department of Labor (DOL) has announced a final rule rescinding the Trump administration’s “Joint Employer Status Under the Fair Labor Standards Act” rule, which took effect in March 2020 and provides guidance for determining when multiple employers are considered joint employers and, therefore, jointly liable for labor law violations. The repeal of the rule will likely result in more workers receiving minimum wage and overtime protections under the Fair Labor Standards Act (FLSA) and, in turn, greater legal and financial exposure for employers.

The FLSA generally requires employers to pay non-exempt workers at least the federal minimum wage for all hours worked and at least time and one half the regular rate of pay for hours worked more than 40 in a workweek. Under certain circumstances, an employee of one business may be considered a joint employee of a second business. (The joint employer concept can arise in any context when one company’s workers perform work for another company, but most frequently it arises in the context of staffing agency or leased employees).  If the second business is deemed a “joint employer,” both companies might be liable to the worker for minimum wages and overtime pay under the FLSA.

The joint employer rule that became effective in March 2020 established a four-factor balancing test for determining joint employer status under the FLSA. In determining whether a second company is a joint employer of a worker, the test examines:

  1. Whether the company hires and fires the worker;
  2. Whether the company supervises and controls the worker’s work schedules or conditions of employment to a substantial degree;
  3. Whether the company determines the worker’s rate and method of payment; and
  4. Whether the company maintains the worker’s employment records.

In a news release announcing rescission of the rule, the Biden administration’s DOL concluded that the rescinded rule “included a description of joint employment contrary to statutory language and Congressional intent” and “failed to take into account the department’s prior joint employment guidance.”

The final rule repealing the prior rule becomes effective September 28, 2021. The prior rule made it more difficult for companies to be held liable as joint employers and was generally considered a positive development for the business community.

©2021 Roetzel & Andress

Immigration Weekly Round-Up: NJ Driver’s Licenses Skyrocket; White House Seeks Speedier Processing at Border and With Asylum Cases; COVID Restrictions to Continue at U.S. Border

New Jersey Sees Dramatic Increase in Driver’s Licenses after Permitting Undocumented Individuals to Apply

The state of New Jersey has seen a more than 60% increase in new driver’s licenses issued since May 1, as the new state law took effect law that permitted residents to obtain licenses regardless of immigration status. The Motor Vehicle Commission (MVC) does not keep records of immigration status and thus could not confirm the cause of the increase. However, a rise of 100,000 total licenses issued over the past three months, from the typical 60,000 over the same period in previous years, is likely fueled in significant part by the new law.

Although more driver’s licenses have been issued, backlogs have also increased, with some people now waiting several weeks for appointments to receive their licenses. Immigrant rights activists have expressed frustration over the delay, with the New Jersey Alliance for Immigrant Justice stating that the “MVC had nearly 3 years of notice and more than enough time to engage advocates and the community to prepare.” The MVC has indicated that it plans to add personnel to its facilities to make more appointments available and increase awareness of online resources so that many people can avoid unnecessary in-person trips.

President Biden Aims to Expedite Asylum Processing

This week, the White House announced a broad new set of initiatives dedicated to streamlining the adjudication of asylum applications in the United States while also increasing the use of expedited removal of detained noncitizens while entering the United States without documentation.

The Biden administration stated that it had established a separate docket in the immigration court system to handle asylum applications to help manage the extensive backlog of cases throughout the United States. President Biden has also requested funding in next year’s budget for an additional 100 immigration judges and new support staff and asked for $15 million in funding to support pro bono legal services for immigrants facing removal proceedings. Meanwhile, President Biden has called to expand the expedited removal process, allowing immigration officers to order a noncitizen’s removal from the United States even before that person has seen a judge, coming within the larger stated goal of strengthening border security.

COVID-19 Border Restrictions to Remain in Place

The White House has delayed implementing a plan for a partial rescission of a policy instituted by the Trump administration following the onset of the COVID-19 pandemic that permitted border officials to summarily expel immigrants at the U.S./Mexico border in an attempt to stem the spread of the coronavirus. President Biden cited the new dangers of the Delta variant as the reason for the delay.

President Biden is facing pressure on both sides of his party on this issue. Many Democrats have urged Biden to ease this policy, arguing that it prevents a proper review of whether immigrants have a legitimate claim to remain in the United States. California Democrat Judy Chu told Reuters news that “they’re just indiscriminately rejecting people and sending them back.” However, other Democrats, such as Henry Cuellar of Texas, have stated that the focus must be on the safety of border communities and stopping undocumented entry into the country.

The White House did not immediately make clear when it would revisit the policy.

©2021 Norris McLaughlin P.A., All Rights Reserved

Article By William C. Menard at Norris McLaughlin P.A. For more Immigration News see the National Law Review Immigration Law section.

COVID-19 Fears Prompt State Department ‘Do Not Travel’ Advisory for UK, Other Restrictions Continue

The State Department, in coordination with the CDC, raised its Travel Advisory for the United Kingdom to “Do Not Travel” because of COVID-19 (Level IV).

Coincidentally, the Department’s move came on the same day Prime Minister Boris Johnson lifted most COVID-19-related restrictions in the United Kingdom (yet, excluding Wales, Scotland, and Northern Ireland). He made this move as the case numbers are rising because most adults in the United Kingdom are fully vaccinated.

Despite the United Kingdom lifting its restrictions, the European Union has opened its borders to individuals from the United States (with various restrictions). Further, Canada is about to open its borders to fully vaccinated U.S. citizens and permanent residents. Moreover, the White House reported that the United States will not be lifting travel restrictions due to the spread of the Delta variant. Press Secretary Jen Psaki said that it is not clear how long the restrictions will last. As of July 23, 2021, the CDC announced that the seven-day average of COVID-19 cases in the United States was up over 46 percent from the prior week.

Therefore, despite lobbying efforts aimed at increasing summer tourism from Europe, the Presidential Proclamations restricting travel to the United States due to COVID-19 are likely to remain in effect throughout the tourist season and beyond. The travel restrictions were imposed more than a year ago, in January 2020, when President Donald Trump instituted the ban on travel from China. Further bans were instituted in 2020 and 2021 on individuals travelling from Iran, the United Kingdom, Ireland, the 26-member countries of the Schengen Zone, Brazil, South Africa, and, more recently, India. To overcome these restrictions those who need to travel to the United States but are subject to the bans must either “camp-out” in a non-banned country (if they can enter such a country) for 14 days before attempting to enter the United States or they must apply for and receive a National Interest Exception (NIE) to the relevant ban. Eligibility for NIEs is set forth in a web of complex and changing guidance from the Department of State and Customs and Border Protection.

Employers all over the country are suffering due to the bans. Their key employees cannot travel back and forth from or to the United States for important business purposes. The highly skilled or temporary, seasonal workers they need to boost their businesses and the economy cannot be hired. This is compounded by the fact that most U.S. consulates abroad are extremely back-logged and understaffed due to COVID-19.

Jackson Lewis P.C. © 2021

Whistleblower Rewarded Over $2 Million for Exposing Contractor of Military Helicopters That Provided Unsafe Helicopters, Risking the Lives of Military Members Deployed to War Zones

An Illinois-based aviation services company and its subsidiary in Florida have agreed to pay the government $11,088,000 to resolve allegations that they violated the False Claims Act by breaching their contract to maintain military aircraft that were “fully mission capable.”

The aviation service companies own and maintain helicopters.  They had contracted with the Department of Defense to supply helicopters for use in transporting cargo and personnel in support of missions in Afghanistan and Africa.  However, according to a whistleblower, the aviation companies schemed to maximize profits by failing to provide the resources needed to maintain the helicopters.  This resulted in the helicopters not being airworthy.  Yet, the companies continued to certify the helicopters as “fully mission capable.”  Thus, it was alleged, the companies knowingly risked the lives of military personal who were using the aircraft while deployed in war zones and committing fraud against U.S. taxpayers.

The same companies also paid an additional amount to resolve a separate matter brought by the Federal Aviation Administration (FAA) against them for deficiencies in helicopter maintenance work.

This lawsuit originated from a former employee of the aviation service companies who brought suit under the qui tam, or whistleblower, provisions of the False Claims Act. Whistleblower lawsuits allow private parties, known as “relators,” to bring suit on behalf of the government and to share in any recovery, usually 15% to 25% of the settlement amount.  In this case, the whistleblower will receive $2,162,160.  The False Claims Act allows the government to intervene and prosecute an action, as it did in this case.  Fraud in government contracting is often exposed by individuals with knowledge that the fraud is occurring, as in this case. Whistleblowers may be employees, clients, or competitors of the wrongdoer.  Such individuals can use their inside knowledge to bring fraud to the attention of the government, saving lives and protecting taxpayer money.

© 2021 by Tycko & Zavareei LLP

CDC Changes Masking Guidance for Fully Vaccinated Individuals

The Centers for Disease Control (CDC) announced on July 27, 2021 that it will adjust its advice to recommend that vaccinated people in substantial or high transmission areas of COVID-19 (defined below) wear masks in indoor public spaces. This guidance will substantially alter the CDC’s May 13 guidance that largely exempted fully vaccinated individuals from the indoor mask requirement. There has been no change in the outdoor masking recommendations at this time. In changing its masking recommendations, the CDC asserts that current scientific information indicates that the delta variant can be spread despite vaccine status, warranting an adjustment to its prior guidance.

Below is a summary of the updated guidance based on the media telebriefing:

  • In public indoor settings in areas of substantial or high transmission, all are to wear masks – including fully vaccinated individuals.
  • All individuals in K-12 schools must wear a mask, regardless of vaccination status, including teachers, staff, and visitors.
  • There should be a continuing effort to strongly encourage vaccination to reduce the spread of COVID-19, including the delta variant.
  • Community leaders should encourage universal masking and vaccination nationwide, regardless of whether or not in a substantial or high transmission area.

Despite the updated guidance, CDC Director Dr. Rochelle Walensky emphasized that wearing a mask is a “personal choice” and no “stigma” should attach to the decision whether or not to wear a mask. Moreover, Dr. Walensky acknowledged that the renewed indoor masking requirement would “weigh heavily” with individuals who are already fully vaccinated. The White House has not provided additional comment on the CDC guidance as of this writing.

The definition of a substantial or high transmission area is based on the CDC’s COVID-19 Data Tracker, which tracks the level of community transmission by county nationwide. Notably, the updated guidance does not apply to areas of moderate or low transmission.

While the CDC guidance is not mandatory, employers are advised to evaluate their workplace policies to determine the extent to which it may be prudent to alter workplace masking requirements. Additionally, states and cities are free to institute their own legally binding masking requirements, regardless of the CDC guidance. Employers are advised to closely monitor state and local developments. We also note that it is unclear what, if any, impact the CDC guidance will have on OSHA’s recent healthcare emergency temporary standard for healthcare employers or its enforcement of its safe workplace standards.

©2021 von Briesen & Roper, s.c

Article By John A. Rubin and Robert J. Simandl at von Briesen & Roper, s.c.

For more CDC COVID-related guidelines, see the National Law Review Coronavirus News section.

Will Louisiana’s New Laws for Self-Driving Delivery Devices Prevent Accidents?

Retail chains, grocery stores, and restaurants have been actively developing methods to deliver products faster. With inventions like self-driving cars and drones, it was only a matter of time before delivery services took advantage. But with any new technology comes safety concerns.

Republican Sen. Rick Ward sponsored a new bill to outline how driverless delivery devices are allowed to operate on Louisiana streets. Governor John Bel Edwards signed the bill and it went into effect immediately. With these new laws in place, Louisiana lawmakers hope to keep motorists and pedestrians safe as they share travel alongside self-driving delivery devices.

Self-Driving Technology

Self-driving cars have been in the works since the 1920s. Carnegie Mellon University’s Navlab and ALV projects built a computer-controlled vehicle in 1984. Since then autonomous technology has expanded to other devices to serve various markets.

Autonomous Cars

When most people think of self-driving technology, they think of autonomous cars. This type of self-driving machine can go long distances and carry larger cargo. Autonomous cars typically transport people while vans may transport smaller self-driving bots.

Surprisingly, the largest safety risk posed to autonomous cars is human unpredictability. The vehicles are programmed to obey strict safety guidelines along with the rules of the road. In theory, that should be adequate to ensure safety. In reality, these vehicles are bullied by human motorists who drive aggressively.

Drones

The first modern drone was developed in 1935. These small, unmanned aircrafts transformed from military equipment to personal aerial cameras. In June 2021, Kroger became the next company to utilize self-driving devices by launching their first drone flight to deliver groceries.

Airborne drones can fly over traffic jams or obstructions. This would allow them to make deliveries in rural areas that traditional delivery trucks cannot reach. Potential complications arise from privacy issues and Federal Aviation Administration (FAA) regulations.

Last-Mile Bots

Last-mile bots, also known as ground drones, are typically small robots that travel short distances. They may cross streets but otherwise tend to remain on sidewalks as they complete a delivery’s last leg of the journey. These robots are designed to navigate sleep inclines, curbs, and unpaved surfaces.

The biggest limitation of last-mile bots is the size and weight of the deliveries they can carry. Severe weather may also pose challenges. Companies like DoorDash and Postmates successfully use last-mile bots to make multiple short deliveries that delivery drivers typically don’t want to accept.

Louisiana’s New Laws for Self-Driving Delivery Devices

As new technologies emerge, so do new laws to govern their usage. Under Louisiana’s Senate Bill 147, self-driving delivery devices must move at low speeds. They cannot exceed 20 miles per hour. They are limited to 12 miles per hour in pedestrian areas, which is roughly the speed of a person jogging.

These autonomous delivery robots must yield to pedestrians. They cannot obstruct the flow of traffic. They must also be equipped with lights on the front and rear.

The companies utilizing robot delivery must ensure each vehicle carries at least $100,000 insurance coverage. Additionally, these devices are not permitted to transport hazardous materials.

Are Self-Driving Delivery Devices Safe?

Due to the high standards of robotics developers, driverless vehicles are generally safer than cars with human drivers. Safety is paramount, since according to a car accident lawyer in New Orleans, nearly 14% of Louisiana drivers don’t have auto insurance.

Louisiana’s new laws aim to prevent accidents both to motorists and pedestrians. Multiple states have passed similar legislation to protect people sharing space with these vehicles. However, Louisiana’s bill permits governing officials and airport authorities to establish additional laws or ban self-driving delivery devices if they pose a danger to public safety in the future.

Who Is Liable When a Self-Driving Delivery Vehicle Causes an Accident?

At this time, no delivery vehicles that are 100% automated are in use, so there are no laws or regulations to determine who would be liable in an accident. However, if there were an accident involving a self-driving delivery vehicle and it could be proven that the vehicle’s operators were negligent, in theory, they would be legally liable.

There are several ways a company’s negligence could lead to an accident. For example, they could fail to maintain the vehicle or to perform critical software updates. Just as with any other type of vehicle on the road, self-driving delivery vehicles can and will get into accidents. When it happens, expect to see increased regulations and lawsuits.

© Laborde Earles Law Firm 2021

CPSC Sues Amazon to Force Recall of Hazardous Products Sold on Amazon.com

The U.S. Consumer Product Safety Commission (CPSC) announced on July 14, 2021, that it filed an administrative complaint against Amazon.com, “the world’s largest retailer, to force Amazon to accept responsibility for recalling potentially hazardous products sold on Amazon.com.” CPSC claims that the specified products sold through Amazon’s “fulfilled by Amazon” (FBA) program are defective and pose a risk of serious injury or death to consumers and that Amazon is legally responsible to recall them. According to the complaint, the products include “24,000 faulty carbon monoxide detectors that fail to alarm, numerous children’s sleepwear garments that are in violation of the flammable fabric safety standard risking burn injuries to children, and nearly 400,000 hair dryers sold without the required immersion protection devices that protect consumers against shock and electrocution.”

CPSC filed the complaint under the Consumer Product Safety Act (CPSA). According to the complaint, Amazon acts as a “distributor,” as defined by CPSA, of its FBA products by: (a) receiving delivery of FBA consumer products from a merchant with the intent to distribute the product further; (b) holding, storing, sorting, and preparing for shipment FBA products in its warehouses and fulfillment centers; and (c) distributing FBA consumer products into commerce by delivering FBA products directly to consumers or to common carriers for delivery to consumers.

The complaint states that after CPSC notified Amazon about the hazards presented by the specified products, Amazon took “several unilateral actions,” including:

  • Removing the Amazon Standard Identification Numbers (ASIN) for certain of the specified products; and
  • Notifying consumers who purchased certain of the specified products that they could present a hazard. Amazon also offered a refund to these consumers in the form of an Amazon gift card credited to their account.

According to the complaint, these actions “are insufficient to remediate the hazards posed by the Subject Products and do not constitute a fully effectuated Section 15 mandatory corrective action ordered by” CPSC. The complaint states that “[a] Section 15 order requiring Amazon to take additional actions in conjunction with the CPSC as a distributor is necessary for public safety.” The complaint asks CPSC to:

  1. Determine that Amazon is a distributor of consumer products in commerce, as those terms are defined in the CPSA;
  2. Determine that the specified products are substantial product hazards under CPSA Sections 15(a)(1), 15(a)(2), and 15(j);
  3. Determine that public notification in consultation with CPSC is required to protect the public adequately from substantial products hazards created by the specified products, and order Amazon to take actions set out in CPSA Section 15(c)(1), including but not limited to:
    1. Cease distribution of the specified products, including removal of the ASINs and any other listings of the specified products and functionally identical products, from Amazon’s online marketplace and identifying such ASINs to CPSC;
    2. Issue a CPSC-approved direct notice to all consumers who purchased the specified products that includes a particularized description of the hazard presented by each specified product and encourage the return of the specified product;
    3. Issue a CPSC-approved press release, as well as any other public notice documents or postings required by CPSC staff, that inform consumers of the hazard posed by the specified products and encourage the return or destruction of the specified products;
  4. Order that Amazon facilitate the return and destruction of the specified products, at no cost to consumers, to protect the public adequately from the substantial product hazard posed by the specified products, and order Amazon to take actions set out in CPSA Section 15(d)(1), including but not limited to:
    1. Refund the full the purchase price to all consumers who purchased the specified products and, to the extent not already completed, conditioning such refunds on consumers returning the specified products or providing proof of destruction;
    2. Destroy the specified products that are returned to Amazon by consumers or that remain in Amazon’s inventory, with proof of such destruction via a certificate of destruction or other acceptable documentation provided to CPSC staff;
    3. Provide monthly progress reports to reflect, among other things, the number of specified products located in Amazon’s inventory, returned by consumers, and destroyed;
    4. Provide monthly progress reports identifying all functionally equivalent products removed by Amazon from amazon.com pursuant to the CPSC Order, including the ASIN, the number distributed prior to removal, and the platform through which the products were sold;
  5. Provide monthly reports summarizing the incident data submitted to CPSC through the Retailer Reporting Program;
  6. Order that Amazon is prohibited from distributing in commerce the specified products, including any functionally identical products; and
  7. Order that Amazon take other and further actions as CPSC deems necessary to protect the public health and safety and to comply with CPSA and the Flammable Fabrics Act (FFA).

CPSC “urges consumers to visit SaferProducts.gov to check for recalls prior to purchasing products and to report any incidents or injuries to the CPSC.” CPSC published the complaint in the July 21, 2021, Federal Register. 86 Fed. Reg. 38450.

Commentary

In CPSC’s July 14, 2021, press release, Acting Chair Robert Adler states that the decision to file an administrative complaint is “a huge step across a vast desert — we must grapple with how to deal with these massive third-party platforms more efficiently, and how best to protect the American consumers who rely on them.” According to The Washington Post, CPSC issued the administrative complaint “after months of behind-the-scenes negotiations between regulators and Amazon as the agency tried to persuade the company to follow the CPSC’s rules for getting dangerous products off the market, according to a senior agency official who spoke on the condition of anonymity to comment on internal discussions.” This same official stated that “Amazon officials refused to acknowledge that the CPSC has the authority to compel the company to remove unsafe products.”

As reported in our February 16, 2018, blog item, “EPA Settles with Amazon on Distribution of Unregistered Pesticides,” the U.S. Environmental Protection Agency (EPA) and Amazon entered into a Consent Agreement and Final Order (CAFO) whereby Amazon agreed to pay $1,215,700 in civil penalties for approximately 4,000 alleged violations under Section 3 of the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA) for the distribution of unregistered pesticide products. EPA later issued stop sale, use, or removal orders (SSURO) to Amazon and eBay for selling certain pesticide products that EPA claims are unregistered, misbranded, or restricted-use pesticides, and pesticide devices that EPA asserts make false or misleading claims. More information on the SSURO is available in our June 17, 2020, blog item, “EPA Issues Stop Sale, Use, or Removal Orders to Amazon and eBay for Unregistered and Misbranded Pesticides and Devices, Including Products with Claims Related to COVID-19.”

As reported in our October 9, 2020, blog item, Representatives Frank Pallone, Jr. (D-NJ), Chair of the House Committee on Energy and Commerce, and Jan Schakowsky (D-IL), Chair of the House Energy and Commerce Subcommittee on Consumer Protection and Commerce, requested that Amazon Chief Executive Officer (CEO) and Chair Jeff Bezos launch an investigation into the safety of Amazon’s product line, AmazonBasics, and answer a series of questions pertaining to the company’s product safety and recall practices. The Committee’s October 7, 2020, press release notes that the request comes after a CNN investigation found that many of AmazonBasics’ electronic products “have exploded, caught fire, sparked, melted, or otherwise created hazardous situations at rates well above comparable products.” According to the press release, many of these products were never recalled and continue to be sold.

CPSC’s administrative complaint is just the latest indication of the pressure on Amazon to ensure the safety of the products the platform hosts. These federal agency and Congressional efforts will almost certainly cause more pressure on product manufacturers to ensure the products they offer for sale on Amazon are compliant with the relevant regulations.

©2021 Bergeson & Campbell, P.C.

Article By Lynn L. Bergeson, Lisa M. Campbell and Carla N. Hutton at Bergeson & Campbell, P.C. For more CPSC news, see the Consumer Protection section of the National Law Review.

Iced Out: Use of Ice Cube’s Image and Catchphrase Was Not Endorsement

Rapper and actor O’Shea Jackson, professionally known as Ice Cube, lost his day in court (for now) on claims of false endorsement against trading platform Robinhood because he failed to plausibly allege that Robinhood’s use of his image and catchphrase implied endorsement.  Robinhood had published a newsletter on its website “Robinhood Snacks” which featured an article discussing market corrections for technology stocks with an alteration of Ice Cube’s lyric and catchphrase “Check yo self before you wreck yourself”—here, “Correct yourself before you wreck yourself”—along with the below image of Ice Cube from Are We Done Yet? (2007):

In response, Ice Cube filed a complaint in the U.S. District Court for the Northern District of California, alleging that Robinhood’s article falsely implied that he had endorsed Robinhood and its services.  He claimed false endorsement under the Lanham Act as well as misappropriation of likeness and unfair competition under California law.  Robinhood filed a motion to dismiss the complaint for lack of standing and a motion to strike the state law claims under California’s Anti-SLAPP statute as protected speech.

As noted by the court, to establish standing a plaintiff must demonstrate an “injury in fact,” meaning the plaintiff suffered “an invasion of a legally protected interest” that is “concrete and particularized” and “actual or imminent, not conjectural or hypothetical.”  Lujan v. Defenders of Wildlife, 504 U.S. 555, 560 (1992).  Citing Waits v. Frito-Lay, Inc., 978 F.2d 1093, 1110 (9th Cir. 1992), the court further held that “a celebrity whose endorsement of a product is implied through the imitation of a distinctive attribute of the celebrity’s identity, has standing to sue for false endorsement” under the Lanham Act.

While the court acknowledged that a celebrity could establish standing under Waits, Robinhood argued that Ice Cube failed to plausibly plead (1) his celebrity status, (2) he was deprived of compensation, and (3) use of his identity and catchphrase implied endorsement.

In ruling on the motion to dismiss, the court found that Ice Cube sufficiently pleaded celebrity status.  It discredited Robinhood’s argument that Ice Cube lacked such status because he relied on his music in the 1980s and movies in the 1990s.  The court questioned why Robinhood would have used Ice Cube’s image and catchphrase in the first place if he had no status as a celebrity.  The court also found that Ice Cube robustly alleged he had commercialized his celebrity status and therefore adequately pleaded economic injury.

In the end, however, the court held that Ice Cube did not plausibly plead that the use of his likeness or catchphrase suggested he endorsed Robinhood’s products.  Although Ice Cube cited Robinhood’s other celebrity endorsements from rappers Nas and Jay-Z, the court found those endorsements were irrelevant.  It also contrasted Robinhood’s use of his likeness and catchphrase with other cases cited by Ice Cube, which all involved explicit endorsements.  Furthermore, without explaining the distinction, the court noted that the article was part of a newsletter, not an “advertisement” as Ice Cube claimed, and that under such circumstances no other court had found standing.  Thus, the court concluded that Ice Cube lacked standing because “he did not allege how Robinhood’s use of his identity created the misapprehension that the plaintiff sponsored, endorsed, or is affiliated with Robinhood.”

Although the court granted Robinhood’s motion to dismiss, it allowed Ice Cube to amend his complaint, which he amended and refiled on July 6, 2021.   Whether Ice Cube has now plausibly pleaded endorsement remains to be seen.

The case is Jackson v. Robinhood Markets, Inc., No. 21-CV-02304-LB (N.D. Cal. June 15, 2021).

© 2021 Finnegan, Henderson, Farabow, Garrett & Dunner, LLP
For more articles on trademark misappropriation, visit the NLR Communications, Media & Internet section.

FBI Issues Cyber Attack Alert Against Tokyo Olympics Service Providers

On July 19, 2021, the Federal Bureau of Investigations issued a Private Industry Notification to service providers and “entities associated with the Tokyo 2020 Summer Olympics that cyber actors who wish to disrupt the event could use distributed denial of service (DDoS) attacks, ransomware, social engineering, phishing campaigns, or insider threats to block or disrupt live broadcasts of the event, steal and possibly hack and leak or hold hostage sensitive data, or impact public or private digital infrastructure supporting the Olympics.”

According to the Notification, “Malicious activity could disrupt multiple functions, including media broadcasting environments, hospitality, transit, ticketing, or security.”

The Notification points out that large events attract extra attention from cybercriminals and nation-state actors such as the attacks during the 2018 PyeongChang Winter Olympics. The FBI indicted Russian-based actors for intrusions during the Winter Olympics, including one that disrupted the Opening Ceremony.

The FBI encourages “service providers and other relevant partners to maintain business continuity plans to minimize essential service interruptions, as well as preemptively evaluate potential continuity and capability gaps…the FBI encourages regularly monitoring networks and employing best practices.” The Notification then provides details on what those best practices are.

Frankly, the list of best practices provided by the FBI are best practices for all companies, including those supporting the Tokyo Olympics.

Copyright © 2021 Robinson & Cole LLP. All rights reserved.
For more articles on cybersecurity, visit the NLRCommunications, Media & Internet section.

Don’t Count Your Lamborghinis Before Your Trademark is in Use

The US Court of Appeals for the Ninth Circuit affirmed a grant of summary judgment, finding that a trademark registrant had alleged infringement of its trademark without having engaged in bona fide use of the trademark in commerce, as required by the Lanham Act. The Court found no material issue of fact as to whether the registrant had used the mark in commerce in a manner to properly secure registration, and the alleged infringer therefore was entitled to cancellation of the registration. Social Technologies LLC v. Apple Inc., Case No. 320-15241 (9th Cir. July 13, 2021) (Restani, J., sitting by designation)

This dispute traces back to a 2016 intent-to-use US trademark application filed by Social Technologies for the mark MEMOJI in connection with a mobile phone software application. After filing its application, Social Technologies engaged in some early-stage activities to develop a business plan and seek investors. On June 4, 2018, Apple announced its own MEMOJI software, acquired from a third party, that allowed users to transform images of themselves into emoji-style characters. At that date, Social Technologies had not yet written any code for its own app and had engaged only in promotional activities for the planned software.

Apple’s MEMOJI announcement triggered Social Technologies to rush to develop its MEMOJI app, which it launched three weeks later (although system bugs caused the app to be removed promptly from the Google Play Store). Social Technologies then used that app launch to submit a statement of use for its trademark application in order to secure registration of the MEMOJI trademark. The record also showed that over the course of those three weeks, Social Technologies’ co-founder and president sent several internal emails urging acceleration of the software development in preparation to file a trademark infringement lawsuit against Apple, writing to the company’s developers that it was “[t]ime to get paid, gentlemen,” and to “[g]et your Lamborghini picked out!”

By September 2018, Apple had initiated a petition before the Trademark Trial & Appeal Board to cancel Social Technologies’ MEMOJI registration. Social Technologies responded by filing a lawsuit for trademark infringement and seeking a declaratory judgment of non-infringement and validity of its MEMOJI registration. When both parties moved for summary judgement, the district court determined that Social Technologies had not engaged in bona fide use of the MEMOJI trademark and held that Apple was entitled to cancellation of Social Technologies’ registration. Social Technologies appealed.

Reviewing the district court’s grant of summary judgment de novo, the Ninth Circuit framed its analysis under the Lanham Act’s use in commerce requirement, which requires bona fide use of a mark in the ordinary course of trade and “not merely to reserve a right” in the mark. The issue on appeal was whether Social Technologies used the MEMOJI mark in commerce in such a manner to render its trademark registration valid.

The Ninth Circuit then explained the Lanham Act’s use in commerce requirement, which requires “use of a genuine character” determined by the totality of the circumstances (including “non-sales activity”), and explained that mere adoption of a trademark, without bona fide use in commerce, in an attempt to reserve rights for the future, is insufficient to establish rights in the mark. The Court reviewed supporting case law, distinguishing between cases where mere promotional activities or internal sales were determined not to constitute use in commerce, and cases where continuous use of a mark as a business name, in public relations campaigns, in sales presentations and in media coverage together sufficiently established bona fide use in commerce. The Court explained that looks for “external manifestation” and “sufficiently public use” to warrant trademark protection.

On the facts of the case before it, the Ninth Circuit found that the record evidence clearly demonstrated that Social Technologies’ use of the MEMOJI mark had not been bona fide use in commerce. With respect to its activities prior to Apple’s June 2018 MEMOJI announcement (which included no software code, the unsuccessful solicitation of investors, and no “association among consumers between the mark and the mark’s owner”), there was not sufficient use to entitle Social Technologies to trademark protection. The Court found that Social Technologies failed to put forward evidence that its admittedly rushed release of the software following Apple’s 2018 announcement was for a genuine commercial purpose warranting trademark protection, rather than mere “token use” in an attempt to reserve a right in the mark.

Affirming the district court’s grant of summary judgment, the Ninth Circuit concluded that Social Technologies did not engage in bona fide use of the MEMOJI trademark in commerce, that its registration was invalid, and that Apple was entitled to cancellation of Social Technologies’ MEMOJI registration.

© 2021 McDermott Will & Emery
For more articles on IP law, visit the NLR

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