Tag: New York

Are You Being Served? Court Authorizes Service of Process Via Airdrop

In what may be the first of its kind, a New York state court has authorized service via token airdrop in a case regarding allegedly stolen cryptocurrency assets. This form of alternative service is novel but could become a more routine practice in an industry where the identities of potential parties to litigation may be difficult to ascertain using blockchain data alone.

Background on the Dispute

According to the Complaint in the case, the plaintiff LCX AG (“LCX”) is a Liechtenstein based virtual currency exchange. As alleged in the Complaint, on or about January 8, 2022, the unknown defendants (named in the Complaint as John Does 1-25) illegitimately gained access to LCX’s cryptocurrency wallet and transferred $7.94 million worth of digital assets out of LCX’s control. Cryptocurrency wallets are similar in many ways to bank accounts, in that they can be used to hold and transfer assets. In the same way a thief can transfer funds from a bank account if they gain access to that account, thieves can also transfer cryptocurrency assets if they gain access to the keys to the wallet holding digital assets.

Following the alleged theft, LCX and its third-party consulting firm determined that the suspected thieves used “Tornado Cash,” which is a “mixing” service designed to hide transactions on an otherwise publicly available blockchain ledger by using complicated transfers between unrelated wallets. While Tornado Cash and other mixing services have legal purposes such as preserving the anonymity of parties to legitimate transactions, they are also utilized by criminals to launder digital funds in an illicit manner.

Even the use of these mixing services, however, can often also be unwound. This is especially true in transactions of large amounts of cryptocurrency, similar to how transactions utilizing complex money laundering schemes in the international banking system can be unwound. According to the blockchain data platform Chainalysis, although Illicit crypto transactions reached an all-time high of $14 billion in 2021, these suspected nefarious transactions accounted for 0.15% of crypto volume last year, down from 0.62% in 2020.

While the Complaint alleges the suspected thieves used Tornado Cash, LCX believes its hired consultants were able to unwind those mixing services to identify a wallet which is alleged to still hold $1.274 million of the allegedly stolen assets.

Unlike bank accounts which have associated identifying information, there are often no registered addresses or other identifying information connected to digital wallets. This makes it difficult to provide the actual proof of service required to institute an action or obtain a judgement against an individual where the only known information is their digital wallet addresses. Service via token airdrop into those wallet addresses solves that issue.

Service Via Airdrop

Service of lawsuits is traditionally made on the defendant personally at a home or business address via special process servers. In cases where service on the individual is not possible for some reason, many states authorize alternative means of service if the plaintiff can show that the alternative means of service likely to provide actual notice of the litigation to the defendant. For example, courts have historically allowed notice via newspaper publication as an alternative means of service where the defendant cannot be serviced personally.

Here, the Court permitted service via “airdrop” in which a digital token is placed in a specific cryptocurrency wallet, similar to how a direct deposit can place funds in a traditional bank account. This particular token contained a hyperlink to the associated court filings in the case, and a mechanism which allowed the data of any individual who clicked on the hyperlink to be tracked. While this is a novel way to serve notice of a lawsuit, similar airdrops have been used to communicate with the owners of otherwise anonymous cryptocurrency wallet owners. Such was the case recently when actor Seth Green had his Bored Ape non-fungible token (“NFT”) stolen and the unknowing buyer of the stolen NFT was otherwise difficult to locate.

While this type of digital service is new, it could be implemented in many disputes in the future regarding digital assets. Similar to the authorization of service that was seen recently in the Facebook Biometric Information Privacy Act litigation (where notice was served on potential class members via email and directly on the Facebook platform), service via airdrop may be the most efficient way to inform potential lawsuit participants of the pending dispute and how they can protect their rights in that dispute.

This type of airdropped service is not without issues, though. First, transactions on the blockchain are largely publicly available, meaning any individual with the wallet address would also be able to see service of the lawsuit notice. Additionally, many users are hesitant to click on unknown links (such as the one in the airdropped LCX) due to legitimate cybersecurity concerns.

While service via airdropped token is unlikely to replace traditional methods of service, it may be a useful means of serving process on unknown persons where there is a digital wallet linked to the acts which the applicable lawsuit relates.

Article By Bryan M. Westhoff, Daniel L. McAvoy, and Jonathan E. Schmalfeld of Polsinelli PC

For more litigation legal news, click here to visit the National Law Review.

© Polsinelli PC, Polsinelli LLP in California

Preparing Corporate Messaging in the Wake of Dobbs

The United States Supreme Court (“SCOTUS”), in Dobbs v. Jackson Women’s Health Organization, has held that there is no constitutional right to abortion, overruling Roe v. Wade and Casey v. Planned Parenthood.

Employers, who increasingly are finding themselves on the front lines of many societal issues, will need to decide quickly whether and how they might address the Dobbs decision, as public reaction has been and is likely to remain strong. Board members, employees, and shareholders may advocate for corporations to take a visible stand on the issue of abortion and reproductive rights. And employees may want to speak up themselves (possibly via employer social media accounts).

It is important to remember that company communication decisions and actions regarding the Dobbs ruling, as well as other political and social issues, can have practical and legal implications.

The first question is whether your company will comment on Dobbs. If you decide to comment, there are many factors to consider. Your message is an important starting point. Who is your intended audience? Will your employees consider it an opportunity to join in the conversation? What will you say? Even if your message is internal, keep in mind that it may not stay that way, given the nature of social media. And before you think, “I’ll just stay out of it,” remember that some will view silence or neutrality as a statement in and of itself. If you choose not to speak, are you prepared to deal with any potential reaction from customers, employees, or shareholders?

Internally, employees may have questions about health benefits or other terms and conditions of employment because of Dobbs. It will be important to arm all key stakeholders, including leadership, corporate communications, and human resources, with tools to consistently manage these communications and responses.

Whether it’s internal or external communications, expect feedback! How that feedback is handled is as important as the initial communication (or lack thereof).

Certain industries, like healthcare and insurance, may also feel compelled to make an affirmative statement if the Dobbs decision has a direct impact on services and/or products. In those cases, the need to consider all implications is even more pressing.

In thinking through these decisions, employers should also consider who may need to approve any messaging. The board of directors, senior executives, legal, and marketing and communications teams are among the key stakeholders who may need to be consulted. And don’t forget that your public-facing employees may bear the brunt of your response. Are they prepared?

Employers should also keep in mind various laws that may govern their reaction, including those they might otherwise not consider. For example, the National Labor Relations Act protects employees’ rights to collectively discuss terms and conditions of employment at work and off duty – and that applies to employers with and without a unionized workforce. The current Biden-appointed General Counsel of the National Labor Relations Board has taken an expanded view of topics that are connected to the workplace. Moreover, some states, including California and New York, have enacted off-duty conduct laws that prohibit employers from disciplining employees for lawful conduct outside of work, which may include political advocacy. There may also be anti-discrimination laws and potential civil and criminal liability associated with your statements, depending on their wording.

Reactions to the Dobbs decision may vary. Some reaction may be comparable to what we’ve seen with respect to other recent political and/or social justice movements, such as Black Lives Matter and #MeToo; others may react differently, or not at all. In these rapidly changing times, companies — particularly publicly traded and consumer-facing ones — need to be make informed decisions. Clear, consistent messaging is key to establishing confident and consistent responses to potential concerns by employees and other stakeholders.

Article By M. Carter DeLorme, Frank C. Morris, JR, Susan Gross Sholinsky, Jennifer Barna, and Erin E. Schaefer of Epstein Becker & Green, P.C.

For more civil rights legal news, click here to visit the National Law Review.

©2022 Epstein Becker & Green, P.C. All rights reserved.

Six Things to Know About New York’s New Employer Notification Requirements for Electronic Monitoring of Employees

Under an amendment to the New York Civil Rights Law that will take effect on May 7, 2022, private-sector employers that monitor their employees’ use of telephones, emails, and the internet must provide notice of such monitoring. The following provides highlights of the new law.

Question 1. Which employers and electronic monitoring activities are covered?

Answer 1. The law applies to any private individual or entity with a place of business in New York, and it broadly covers “telephone conversations or transmissions, electronic mail or transmissions, or internet access or usage by an employee by any electronic device or system, including but not limited to the use of a computer, telephone, wire, radio, or electromagnetic, photoelectronic or photo-optical systems [that] may be subject to monitoring.”

Q2. Are any electronic monitoring activities exempted from coverage?

A2. The law does not cover processes “designed to manage the type or volume of incoming or outgoing electronic mail or telephone, voice mail or internet usage,” and it also does not apply to processes “that are not targeted to monitor or intercept the electronic mail or telephone voice mail or internet usage of a particular individual.” The law also exempts processes that are “performed solely for the purpose of computer system maintenance and/or protection.”

Q3. What are some of the law’s compliance obligations?

A3. Private-sector employers that “monitor[] or otherwise intercept[] [employee] telephone conversations or transmissions, electronic mail or transmissions, or internet access or usage” must post a notice of electronic monitoring in a “conspicuous place which is readily available for viewing” by affected employees. Employers also must furnish new employees with written notice when they are hired. The law requires that newly hired employees acknowledge receipt of the notice, “either in writing or electronically.”

Q4. What information must be included in the notices?

A4. Under the law, employers are required to notify employees that “any and all telephone conversations or transmissions, electronic mail or transmissions, or internet access or usage by an employee by any electronic device or system” may be subject to monitoring “at any and all times and by any lawful means.” The law requires that the written notice advise employees that the electronic devices or systems that may be subject to monitoring include, but are not limited to, “computer, telephone, wire, radio or electromagnetic, photoelectronic or photo-optical systems.”

Q5. What are the penalties for violations of the law?

A5. The law provides for the imposition of civil penalties for violations of its requirements. Employers found to be in violation of the law are subject to civil penalties of $500 for a first offense, $1,000 for a second offense, and $3,000 for a third offense and for each subsequent offense. The Office of the New York State Attorney General will enforce the law.

Q6. Are there similar requirements in other jurisdictions?

A6. Connecticut and Delaware also require employers to provide notification of electronic monitoring. As the requirements of these laws vary slightly from New York’s law, employers doing business in either or both of these states and in New York may wish to consider whether to adopt a single approach, or adopt approaches tailored to each jurisdiction’s requirements.

Key Takeaways

New York employers that have not already taken action to comply with this new law may wish to consider whether to post physical notices in the workplace or utilize electronic postings that are visible upon logging in to the employer’s computer, or both.

Employers may also wish to determine how to incorporate the required notice to new employees in their new-hire and onboarding systems. Employers that address electronic monitoring in existing policies may also wish to review the existing policies to ensure that the information in those policies is consistent with the nature of the notification required by the new law, and update existing policies if warranted.

Employers may also wish to consider whether to obtain written or electronic acknowledgments of electronic monitoring from current employees. In addition, employers may wish to evaluate the potential for challenges to the use of information obtained through electronic monitoring absent compliance with the notice requirements.

© 2022, Ogletree, Deakins, Nash, Smoak & Stewart, P.C., All Rights Reserved.
For more articles about labor laws, visit the NLR Labor & Employment section.

New York To Require Licensure of Pharmacy Benefit Managers

In an effort to counteract rising prescription drug costs and health insurance premiums, New York Governor Hochul signed S3762/A1396 (the Act) on December 31, 2021.  This legislation specifies the registration, licensure, and reporting requirements of pharmacy benefit managers (PBMs) operating in New York. The Superintendent of the Department of Financial Services (Superintendent) will oversee the implementation of this legislation and the ongoing registration and licensure of PBMs in New York. Notably, this legislation establishes a duty of accountability and transparency that PBMs owe in the performance of pharmacy benefit management services.

Though the Governor only recently signed the Act, on January 13, 2022, an additional piece of legislation, S7837/A8388, was introduced in the New York Legislature.  If passed, this legislation would amend and repeal certain provisions proposed in the Act.  As of the date of this blog post, both the Senate and Assembly have passed S7837/A8388, and it has been delivered to the Governor for signature. Anticipating that Governor Hochul will sign S7837/A8388 into law, we have provided an overview of the Act, taking into account the impact that S7837/A8388 will have, and the changes that both make to the New York State Insurance, Public Health, and Finance Laws.

New York State Insurance Law: Article 29 – Pharmacy Benefit Managers

The Act adds Article 29 to the Insurance Law.  The Section includes, among other provisions, definitions applicable to PBMs, as well as licensure, registration, and reporting requirements, as detailed below.

Definitions

Section 2901 incorporates the definitions of “pharmacy benefit manager” and “pharmacy benefit management services” of Section 280-a of the Public Health Law.  “Pharmacy benefit management services” is defined as “the management or administration of prescription drug benefits for a health plan.”  This definition applies regardless of whether the PBM conducts the administration or management directly or indirectly and regardless of whether the PBM and health plan are associated or related. “Pharmacy benefit management services” also includes the procurement of prescription drugs to be dispensed to patients, or the administration or management of prescription drug benefits, including but not limited to:

  • Mail service pharmacy;
  • Claims processing, retail network management, or payment of claims to pharmacies for dispensing prescription drugs;
  • Clinical or other formulary or preferred drug  list  development or management;
  • Negotiation  or  administration  of  rebates, discounts, payment differentials, or other incentives,  for  the  inclusion  of  particular prescription  drugs  in a particular category or to promote the purchase of particular prescription drugs;
  • Patient compliance, therapeutic intervention, or  generic  substitution programs;
  • Disease management;
  • Drug utilization review or prior authorization;
  • Adjudication  of appeals or grievances related to prescription drug coverage;
  • Contracting with network pharmacies; and
  • Controlling the cost of covered prescription drugs.

A “pharmacy benefit manager” is defined as any entity that performs the above listed management services for a health plan.  Finally, the term “health plan” is amended to encompass entities that a PBM either provides management services for and is a health benefit plan or reimburses, in whole or in part, at least prescription drugs, for a “substantial number of beneficiaries” that work in New York.  The Superintendent has the discretion to interpret the phrase “substantial number of beneficiaries.”

Registration Requirements

PBMs currently providing pharmacy benefit management services must register and submit an annual registration fee of $4,000 to the Department of Financial Services (DFS) on or before June 1, 2022 if the PBM intends to continue providing management services after that date. After June 1, 2022, every PBM seeking to engage in management services must register and submit the annual registration fee to DFS prior to engaging in management services. Regardless of when a PBM registers, every PBM registration will expire on December 31, 2023.

Reporting Requirements

On or before July 1 of each year, each PBM must report and affirm the following to the Superintendent, which includes, but is not limited to:

  • Any pricing discounts, rebates of any kind, inflationary payments, credits, clawbacks, fees, grants, chargebacks, reimbursement, other financial or other reimbursements, inducements, refunds or other benefits received by the PBM; and
  • The terms and conditions of any contract or arrangement, including other financial or other reimbursement incentives, inducements, or refunds between the PBM and any other party relating to management services provided to a health plan including, but not limited to, dispending fees paid to pharmacies.

The Superintendent may request additional information from PBMs and their respective officers and directors. Notably, the above documentation and information are confidential and not subject to public disclosure, unless a court order compels it or if the Superintendent determines disclosure is in the public’s best interest.

Licensing Requirements

The Superintendent is also responsible for establishing standards related to PBM licensure.  The Superintendent must consult with the Commissioner of Health while developing the standards.  The standards must address prerequisites for the issuance of a PBM license and detail how a PBM license must be maintained.  The standards will cover, at a minimum, the following topics:

  • Conflicts of interest between PBMs and health plans or insurers;
  • Deceptive practices in connection with the performance of management services;
  • Anti-competitive practices connected to the performance of management services;
  • Unfair claims practices in connection with the performance of pharmacy benefit managements services;
  • Pricing models that PBMs use both for their services and for payment of services;
  • Consumer protection; and
  • Standards and practices used while creating pharmacy networks and while contracting with network pharmacies and other providers and in contracting with network pharmacies and other providers.  This will also cover the promotion of patient access, the use of independent and community pharmacies, and the minimization of excessive concentration and vertical integration of markets.

To obtain a license, PBMs must file an application and pay a licensing fee of $8,000 to the Superintendent for each year that the license will be valid.  The license will expire 36 months after its issuance, and a PBM can renew their license for another 36-month period by refiling an application with the Superintendent.

New York State Public Health Law: Amendments to Section 280-a

Duty, Accountability, and Transparency of PBMs

As briefly mentioned above, the Act also amends Public Health Law 280-a.  Notably, this legislation imposes imposes new duty, accountability, and transparency requirements on PBMs.  Under the new law, PBMs interacting with a covered individual have the same duty to a covered individual as the PBM has to the health plan for which the PBM is performing management services. PBMs are also compelled to act with a duty of good faith and fair dealing towards all parties, including, but not limited to, covered individuals and pharmacies. In addition, PBMs are required to hold all funds received from providing management services in trust.  The PBMs can only utilize the funds in accordance with its contract with their respective health plan.

To promote transparency, PBMs shall account to their health plan any pricing discounts, rebates, clawbacks, fees, or other benefits it has received. The health plan must have access to all of the PBMs’ financial information related to the management services the PBM provides it.  The PBMs are also required to disclose in writing any conflicts of interest PBMs shall disclose in writing any conflicts of interests, as well as disclose the terms and conditions of any contract related to the PBM’s provision of management services to the health plan, including, but not limited to, the dispensing fees paid to pharmacies.

New York State Finance Law: Addition of Section § 99-oo

If enacted, S7837/A8388 will add Section 99-oo to the Finance Law.  This law would create a special fund called the Pharmacy Benefit Manager Regulatory Fund (Fund).  The New York State Comptroller (Comptroller) and Commissioner of Tax and Finance will establish the Fund and hold joint custody over it. The Fund will primarily consist of money collected through fees and penalties imposed under the Insurance Law.  The Comptroller must keep Fund monies separate from other funds, and the money shall remain in the Fund unless a statute or appropriation directs its release.

Looking Forward: PBM Regulation in New York and Beyond

In a January 2, 2022, press release, Governor Hochul touted the Act as “the most comprehensive [PBM] regulatory framework” in the United States.  The Governor has made clear her intent to regulate PBMs, and New York lawmakers appear to just be getting started.  PBMs in New York and throughout the United States should anticipate their state’s legislatures introducing and enacting more laws and regulations.

©1994-2022 Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. All Rights Reserved.
For more about pharmacies, visit the NLR Healthcare section.

Fashion Sustainability and Social Accountability Act Proposed in New York

Happy New Year (are we still saying that?) from the Global Supply Chain Law Blog!  In our ever-evolving society, the fashion industry has taken new heights.  And with those heights, the industry is on pace to account for more than a quarter of the world’s carbon budget, according to the New Standard Institute.   Indeed, the group indicates that apparel and footwear are responsible for roughly 4-8.6% of global greenhouse gas emissions.  You may be wondering, “but how?”  Well after that sweater you bought last year (or even last month!) goes out of style, you may donate it.   According to CBS, some of those donations go overseas to Ghana, for example, to be sold.  The unsold clothes, however, end up as landfills creating an environmental nightmare.

As a result and in an effort to create more regulation, New York is taking action with respect to the environmental nightmare. Earlier this year, the New York legislator proposed a bill—the Fashion sustainability and social accountability act, which would amend the general business law, requiring fashion retail sellers and manufacturers to disclose environmental and social due diligence and policies.

Specifically, every fashion retail seller and fashion manufacturer doing business in the State of New York and having annual global gross revenues that exceed $100 million dollars must disclose its:

  1. environmental and social due diligence[1] policies,
  2. processes and outcomes, including significant real or potential negative environmental and social impacts, and
  3. targets for impact reductions, implementation, improvement and compliance on an annual basis.

The required disclosures would include supply chain mapping of at least 50% of suppliers (which the retail seller or manufacturer could choose) by volume across all tiers of production, a sustainability report, independently verified greenhouse gas reporting, volume of production displaced with recycled materials, and median wages of workers of suppliers compared with local minimum wage, to name a few.

All disclosures must be posted on the retail or manufacturer’s website within a year of enactment.  Enforcement of the bill would fall to the state’s attorney general, who would publish a report listing the fashion retail sellers and manufactures who are out of compliance with the act. Public shaming would not be the only punishment, however.  Retailers and manufacturers who fail to comply may be fined up to 2% of annual revenues of $450 million or more.  The money from the fines will be deposited into a community benefit fund, which will be used for environmental benefit projects that directly and verifiably benefit environmental justice communities.

In short, if the Fashion sustainability and social accountability act is enacted into law, fashion retailers and manufactures will be held accountable for environmental and social impacts stemming from their supply chain and production of apparel and shoes.  According to Vogue, “proponents say the bill will make history” as it could “shift how the fashion industry operates globally.” Thus, stay tuned as we will be tracking the legislation closely and will provide real time updates!

[1] “Due diligence” shall mean the process companies should carry  out to  identify,  prevent, mitigate and account or how they address actual and potential adverse impacts in  their  own  operations,  their  supply chain  and other Business relationships, as recommended in the Organisation for Economic Co-operation and Development Guidelines  for  Multinational  Enterprises,  the  Organisation  for Economic  Co-Operation and Development Due Diligence Guidance for Responsible Business Conduct  and United Nations Guiding Principles for Business and Human Rights.

© Copyright 2022 Squire Patton Boggs (US) LLP
For more articles on sustainability, visit the NLR Environmental, Energy & Resources type of law page.

SDNY Allows Skechers to Walk Away from Trademark Claims

After Skechers began selling open-back women’s shoes under the name “Commute Time” in August 2018, Easy Spirit, owner of the mark TRAVELTIME for similar shoes, sued Skechers in April 2019 for trademark and trade dress infringement under the Lanham Act and New York law.  In January 2021, the U.S. District Court for the Southern District of New York granted summary judgment on the trade dress claims for Skechers, and the remaining trademark infringement claims—trademark infringement under 15 U.S.C. § 1114(a), false designation of origin under 15 U.S.C. § 1125(a), and common law trademark infringement under New York state law, proceeded to trial.  Following a twelve-day bench trial, the district court dismissed the trademark infringement claims, finding no likelihood of confusion existed between the marks.

As the opinion recounted, to succeed on a claim for trademark infringement under 15 U.S.C. § 1114(a), Easy Spirit needed to prove the validity of its mark (which Skechers did not contest) and a likelihood of confusion between the marks.  Analyzing likelihood of confusion, the court assessed the eight factors used by the Second Circuit:  (1) strength of the prior owner’s mark; (2) similarity between the marks; (3) competitive proximity of the products; (4) likelihood that the prior user will bridge the gap; (5) actual confusion; (6) defendant’s good faith; (7) quality of the defendant’s product; and (8) buyer sophistication.

First, in analyzing the strength of Easy Spirit’s TRAVELTIME mark, the court examined its inherent distinctiveness and acquired distinctiveness in the marketplace.  Regarding inherent distinctiveness, the court found that TRAVELTIME was “modestly” inherently distinctive because it was plainly suggestive.  In other words, the mark required some imagination for a purchaser to “go from ‘travel time’ to the idea of movement, then to what one might need when moving, and finally to the product, an open-back comfort shoe.”

As to acquired distinctiveness, which the court explained referred to the recognition that the mark earned in the marketplace as a designator of Easy Spirit’s goods, the opinion analyzed six factors used by the Second Circuit:  (1) advertising expenditures; (2) consumer studies linking the mark to a source; (3) unsolicited media coverage of the product; (4) sales success; (5) attempts to plagiarize the mark; and (6) length and exclusivity of the mark’s use.

Here, the court noted that Easy Spirit did not provide advertising expenditures or other evidence showing how many consumers its TRAVELTIME-specific advertising reached, as opposed to Easy Spirit advertising generally.  Regarding unsolicited media coverage, the court stated that Easy Spirit presented only one piece of evidence from before 2018, so it was unclear if the mark acquired secondary meaning before Skechers started selling its Commute Time shoe that year.

The sales success factor favored Easy Spirit however, as the court cited evidence that the TRAVELTIME shoe became the number-one-selling shoe in U.S. department stores in 2016 and amassed $26.3 million in sales between July 2017 and March 2019.  The court also determined that length and exclusivity moderately weighed in Easy Spirit’s favor because whole Easy Spirit had sold TRAVELTIME shoes continuously since 2004, other shoe companies routinely used marks containing the words “time” or “travel”—including Easy Spirit for its other products.

Thus, the court concluded that Easy Spirit had not provided strong evidence that TRAVELTIME acquired secondary meaning before Skechers began using the Commute Time mark, and accordingly the strength of the mark factor weighed “only moderately” in favor of a likelihood of confusion.

Second, the court held that the marks were not similar based on their overall impression on consumers.  It found several differences in their appearance, including that:  (1) TRAVELTIME is one word while Commute Time is two; (2) TRAVELTIME generally appears in all capital letters but Commute Time does not; and (3) TRAVELTIME is written on one line yet Commute Time generally appears on separate lines.  The court also found that TRAVELTIME appeared on a minimalist beige box with simple orange lettering alone, while Commute Time appeared on a jewel-toned patterned box with various shapes, accents, and other Skechers marks.  And the opinion noted that “travel” and “commute” neither sounded the same nor were synonymous.

Third, the court found no evidence of actual confusion.  It pointed out that Easy Spirit did not submit any consumer survey showing confusion, and while Easy Spirit did not need to, the absence of a survey was evidence actual confusion could not be shown.  The opinion also emphasized Skechers’ survey showing 0% confusion, which Easy Spirit failed to adequately rebut or discredit.  Specifically, the court rejected Easy Spirit’s concern as to the universe of participants, that the survey showed participants the parties’ websites and not those of third-party retailers, and incentives given to participants.  It held that the survey properly targeted consumers beyond women 55-years-and-older because prospective customers should be counted, any marketplace could be replicated given the parties sold their shows on multiple platforms, and incentives are commonly accepted for surveys.

Fourth, the court examined whether Skechers acted in bad faith or with an intent to deceive consumers about the source of its product.  It determined that evidence showing Skechers based some measurements of its shoe on TRAVELTIME but included several aesthetic and functional differences demonstrated an intent to compete rather to deceive.  The court noted that companies in the shoe industry commonly incorporate features of other products in order to compete.

Fifth, the court determined that the customer sophistication factor also weighed in Skechers’ favor.  As neither party presented direct evidence of consumer sophistication, the court stated it could rely solely on indirect indications of sophistication, such as nature of the products or their price.  The court rejected Easy Spirit’s argument that because its customers were older women they were not sophisticated consumers of women’s shoes, finding it borderline “offensive” and contrary to common sense.  It also found the price points of the shoes sufficiently high to indicate thoughtful purchases.

Finally, while Skechers did not contest that the proximity of the goods factor weighed in favor of a likelihood of confusion, the court independently found this factor weighed in Easy Spirit’s favor because the Commute Time shoe was sold to the same class of purchasers, thorough the same marketing channels, and for approximately the same price as the TRAVELTIME shoe.  It did not assess the remaining two factors—bridging the gap and disparity of goods—because the parties agreed they did not apply.

In closing, the court held that no likelihood of confusion existed given the absence of any direct evidence that customers were actually confused or survey evidence of actual confusion.  Accordingly, it dismissed the federal trademark infringement claim.  And because the federal false designation of origin and common law trademark infringement claims also required a likelihood of confusion, the court dismissed those remaining claims too.

The case is Easy Spirit, LLC v. Skechers U.S.A., Inc., No. 19-cv-3299 (JSR), _ F. Supp. 3d _, 2021 WL 5312647 (S.D.N.Y. Nov. 16, 2021).

© 2022 Finnegan, Henderson, Farabow, Garrett & Dunner, LLP
For more articles about trademarks, visit the NLR Intellectual Property Law section.

NYC Announces Private-Sector Vaccine Mandate

On December 6, 2021, outgoing New York City Mayor Bill de Blasio announced major expansions to New York’s “Key to NYC” program, which was implemented through Emergency Executive Order 225 and became effective on August 17, 2021. The mayor also announced a first-in-the-nation vaccination mandate for private-sector workers in New York City, which is set to take effect on December 27, 2021. Additional guidance on these expansive mandates is expected on December 15, 2021.

Private-Sector Vaccine Mandate

The mayor has announced that New York City will implement a “first-in-the-nation,” vaccine mandate for private-sector workers. The mandate is currently set to take effect on December 27, 2021. The mayor estimates that approximately 184,000 businesses would be affected. A spokesperson for Mayor-elect Eric Adams, who is due to take office on January 1, 2022, just days after the mandate is set to take effect, has indicated that the mayor-elect will evaluate the mandate when he takes office and will “make determinations based on science, efficacy and the advice of health professionals.”

Key to NYC Expanded

Under the existing Key to NYC program, staff and patrons who enter certain types of indoor entertainment, recreation, dining, and fitness establishments are required to have received at least one dose of a COVID-19 vaccine. Previously, children under the age of 12, along with certain other individuals were exempt from showing proof of vaccination.

Beginning on December 14, 2021, children ages 5-11 will be required to show proof of at least one dose of the COVID-19 vaccine in order to enter the covered establishments mentioned above. While individuals were previously only required to show proof of one dose of the vaccine, beginning on December 27, individuals in New York City over the age of 12 will now be required to show proof of two doses of the vaccine.

High-Risk Extracurricular Activities

The mayor also announced that vaccinations would be required for children ages 5-11 if they wish to participate in “high-risk extracurricular activities.” These activities are currently defined as “sports, band, orchestra, and dance.” Children in this age group will be required to have the initial vaccine dose by December 14, 2021.

Key Takeaways

Employers in New York City may wish to review the above requirements to ensure that their practices comply with the obligations articulated in the anticipated mandates. Employers may also want to stay updated as the Key to NYC and the private-sector vaccine mandate continues to evolve.

Article By Kelly M. Cardin and Jessica R. Schild of Ogletree, Deakins, Nash, Smoak & Stewart, P.C.

For more labor and employment legal news, click here to visit the National Law Review.

© 2021, Ogletree, Deakins, Nash, Smoak & Stewart, P.C., All Rights Reserved.

COVID-19 Update: NY Governor Cuomo Extends Tenant Protections, Including Eviction and Foreclosure Moratorium

On August 5, 2020, New York State Governor Andrew Cuomo issued Executive Order 202.551 (the “New Order”) to provide additional relief to renters impacted by the COVID-19 pandemic and extended the time periods for certain other protections that had been previously granted to renters and property owners pursuant to Executive Order 202.82, as extended by Executive Order 202.283 and Executive Order 202.484 (the “Prior Orders”).

The Prior Orders provided for (i) a moratorium on evictions of commercial tenants through August 5, 2020, and residential tenants through July 5, 2020, and (ii) a moratorium on eviction and foreclosure of any residential or commercial tenant or owner through August 20, 2020, if the basis of the eviction or foreclosure is the nonpayment of rent or the mortgage, as applicable, and the tenant or owner, as applicable, is eligible for unemployment insurance or benefits under state or federal law or is otherwise facing financial hardship due to the COVID-19 pandemic.

Executive Order 202.48 previously had removed the restrictions on residential foreclosures and residential evictions, as those has been superseded by legislative action.  The Laws of New York 2020, Chapter 112 provides for 180 days of mortgage forbearance for individuals, which period may be extended by the mortgagor for an additional 180 days.5  The Laws of New York 2020, Chapter 127 prohibits evictions of residential tenants that have suffered financial hardship during the COVID-19 pandemic for the non-payment of rent.  In each case, the relief granted extends through the period commencing on March 7, 2020, until the date on which “none of the provisions that closed or otherwise restricted public or private businesses or places of public accommodation, or required postponement or cancellation of all non-essential gatherings of individuals of any size” continue to apply.

The New Order extends a number of existing Executive Orders, including the Prior Orders for an additional 30 days, to September 5, 2020, effectively continuing the moratoria on commercial and residential evictions and foreclosures – whether instituted by executive order or passed into law by the legislature – until such date.

1       Executive Order 202.55, available here.

2       Executive Order 202.8, available here.

3       Executive Order 202.28, available here.

4       Executive Order 202.48, available here.

5       The Laws of New York 2020, Chapters 112 and 127.

© Copyright 2020 Cadwalader, Wickersham & Taft LLP

For more on COVID-19 related rental relief, see the National Law Review Coronavirus News section.

New York City Ban on Pre-Employment Drug Testing Takes Effect May 10, 2020

Starting May 10, 2020, New York City employers may not require prospective employees to submit to testing for the presence of marijuana or tetrahydrocannabinols (or THC, the main psychoactive component of marijuana) in an individual’s system as a condition of employment. Currently, neither New York state nor New York City have any general ban on drug testing during employment.

The long-awaited ban, which was passed in April 2019 and is included as an amendment to the New York City Human Rights Law, outlines several exceptions based on the employer’s industry and the prospective position. These include, for example, police or peace officers, positions requiring a commercial driver’s license or those governed by Department of Transportation regulations, positions subject to testing under federal or state regulations or grant conditions, and positions requiring the supervision or care of children, medical patients or vulnerable persons. The new law also exempts positions that will be subject to a collective bargaining agreement that already addresses pre-employment drug testing for those prospective employees. The amendment also includes an exception for positions with the potential to impact the health or safety of employees or the public as identified by the New York City Commission.

In March 2020, the New York City Human Rights Commission issued proposed rules, which include proposed categories for safety sensitive roles, including positions that require regularly working on an active construction site, or power or gas utility lines, positions regularly operating heavy machinery, positions in which an employee operates a motor vehicle on an approximately daily basis, or positions in which impairment would pose an immediate risk of death or serious physical harm to the employee or others. The public comment period for the proposed rules has passed, but the expected finalizations of these rules has been delayed as a result of the COVID-19 pandemic.

The amendment bans only pre-employment testing for marijuana; it does not address testing for any other substance or mid-employment marijuana testing. However, all New York state employers should be mindful of the potential application of the New York medical marijuana law and applicable employment-related protections, including its relation to disability protections and accommodations under antidiscrimination laws.

Failure to adhere to the new ban on pre-employment screening can result in civil penalties up to $250,000 as well as consequential and punitive damages and attorneys’ fees.

Employers in New York City should review their existing drug-testing policies to confirm that they are in compliance with the new law, as well as contact their testing vendors to ensure any pre-employment tests comply with the new law.

 

© 2020 Faegre Drinker Biddle & Reath LLP. All Rights Reserved.

ARTICLE BY Nicole A. Truso of Faegre Drinker, legal clerk Kerry C. Zaroogian contributed.
For more on drug testing, see the National Law Review Labor & Employment Law section.

Northeast State Solar Programs in Light of COVID-19

COVID-19 is impacting industries across the globe and clean energy is no exception. As the pandemic continues to influence economic relief efforts at both the state and federal level, states are beginning to offer specific forms of relief through their incentive programs.

Additionally, electric distribution companies in each state have declared COVID-19 a force majeure event, allowing extensions to interconnection milestones and in some cases payment schedules. Below are summaries of the specific relief efforts being offered by some states, and more details regarding electric distribution companies’ declaration of a force majeure event.

Massachusetts

The Massachusetts Department of Energy Resources (“DOER”) filed emergency regulations with the Secretary of State following its regulatory 400MW review of the Solar Massachusetts Renewable Target (“SMART”) Program on April 14, 2020. Among the regulations is a blanket extension of six months to all Solar Tariff Generation Units, including any projects that submit their applications before July 1, 2020, due to the ongoing impacts of COVID-19. More details are provided in the DOER’s Statement of Qualification Guideline.

The Massachusetts Department of Public Utilities has also developed a webpage with information and resources specific to COVID-19. The website includes information on the impacts of the electric distribution companies’ respective declarations of COVID-19 as a force majeure event.

New York

The New York State Energy and Environment agencies wrote a letter to the clean energy industry on April 1, 2020, expressing support for the clean energy industry, particularly as construction has been impacted by COVID-19. The agencies announced in the letter that they are seeking input from clean energy industry stakeholders so that the agencies and the industry can work together to form creative solutions. The letter is found on NYSERDA’s COVID-19 page.

Connecticut

In Connecticut, the Department of Energy and Environmental Protection (“DEEP”) is coordinating with governmental offices and stakeholders to offer webinars for clean energy contractors with information about available state and federal aid. Please check in with CT DEEP to find out more information on these offerings.

Maine

The Governor’s Energy Office (GEO) released a statement that the GEO is working with the Maine Public Utilities Commission (PUC) and clean energy stakeholders to answer questions and concerns that are related to COVID-19. Stakeholders that have questions and concerns should contact the GEO for further information.

Electric Distribution Companies’ Force Majeure Declaration

Several electric distribution companies have notified state’s public utilities commissions that COVID-19 is a force majeure event. By declaring a force majeure event, the electric distribution companies have allowed extensions to project milestone dates and in some cases interconnection payments. Electric distribution companies that have not formally declared COVID-19 a force majeure event have waived late fees and extended payment timelines. Individual projects should check in with the electric distribution company specific to the project to confirm how theirs may be impacted.

 

 

© 2020 SHERIN AND LODGEN LLP
ARTICLE BY Tanya M. Larrabee at Sherin and Lodgen LLP, Amy L. Hahn also contributed.
For more on renewable energy programs, see the National Law Review Environmental, Energy & Resources law section.