gTLDs are Already Causing Confusion – Just Ask Wayne Knight and TMZ

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UPDATED July 15, 2015

Actor Wayne Knight (best known as Newman on Seinfeld) was forced to tweet his “proof of life” on Twitter, after a website that uses the domain name TMZ.today reported that he was killed in a traffic accident and the story went viral.  It has been reported that many users credited the story of the death of Wayne Knight because it was circulated with attribution to the website TMZ.today.  TMZ is well known as a major source of real entertainment news and celebrity gossip.  TMZ uses the domain name TMZ.com, but the domain name TMZ.today links to an entirely different website called ebuzzd.com that is actually an unrelated, deliberately fake news website – a website dedicated to hoaxes.

Wayne Knight’s concerns aside, this story presents important lessons for trademark holders and domain name registrants:  New generic Top Level Domains (gTLDs) are here and must be reckoned with.  TMZ.com is not TMZ.today, but it’s a good bet that a substantial portion of the consuming public does not know that.  Will the consuming public realize that your company website “XYZ.com” is not affiliated with XYZ.Today, XYZ.News, XYZ.Info, XYZ.Web, XYZ.Blog, XYZ.Corp, XYZ.Inc, XYZ.London, XYZ.Charity or XYZ.Porn, or any of the 600+ other non-branded gTLDs that are available now and coming online within the next two years?

For a trademark holder, it can be a daunting prospect to try to police that many possible confusing domain names, but there are cost-effective brand protection strategies and solutions.  They begin with recognizing the issue, and making sure that you have taken all appropriate steps to protect your trademarks and domain names.  The most basic step is to obtain U.S. trademark registrations for your important trademarks – especially for your primary brand.  That is the key to many of the solutions that are offered at http://trademark-clearinghouse.com/, the administrative service established by ICANN to help control issuance of gTLDs.   Then, set a strategy that includes monitoring the “Sunrise Periods,” during which registered trademark holders can take the most efficient steps to protect against spurious registrations of confusingly similar domain names with the new gTLDs.

The best and most cost-effective methods of protection against gTLD infringers and domain name cybersquatters will be discussed in future blog posts.  Available methods include preemptive registration, blocking and various forms of policing.  Conkle, Kremer & Engel routinely guides its clients to protect their valuable intellectual property and domain names, including taking proactive steps to address the new threats to trademarks posed by gTLDs.  Contact us if you have questions and need assistance.


 

UPDATE July 15, 2015:  Another example of misuse of gTLD domain extensions happened again and demonstrates that real money can change hands when gTLD domain name extensions are abused.  Twitter stock jumped on July 14, 2015 after what appeared to be the Bloomberg Business website posted a news article reporting that Twitter had received a $31 billion buyout offer.  The story was fake, but it passed for real news by being posted on a website designed as a counterfeit of the Bloomberg Business website and using a new gTLD:  www.bloomberg.market.  The real Bloomberg website is actually found at www.bloomberg.com.  To help make a convincing appearance, the www.bloomberg.market website included links back to the real www.bloomberg.com website.  Enough readers were fooled that Twitter stock price spiked after news of the purported buyout offer was picked up in legitimate media.  gTLD confusion may continue to be a problem for trademark holders until they take affirmative steps to limit the possibilities of confusion and abuse.

 

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DTSC Announces Proposed Priority Products Subject to California Green Chemistry Initiative

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The California Department of Toxic Substances Control (DTSC) has identified the first three groups of products that may become “Priority Products” subject to reporting and alternatives assessments requirements under California’s strict new Safer Consumer Products (SCP) Regulations.

The three groups of products on this initial list of proposed “Priority Products” are:

  • Children’s foam padded sleeping products containing the flame retardant Tris(1,3-dichloro-2-propyl) phosphate (TDCPP or Tris)
  • Spray polyurethane foam (SPF) systems containing unreacted diisocyanates
  • Paint and varnish strippers and surface cleaners containing methylene chloride

Rulemaking on the proposed “Priority Products” list is expected to begin in late June 2014, with the final “Priority Products” list to be finalized by the following year by adoption of regulations.

If the product-chemical combinations announced by DTSC end up on the list of final “Priority Products,” manufacturers and other responsible entities (including importers, assemblers and even retailers) of these products will be required to notify DTSC and either remove the product from sale, reformulate to remove or replace the chemical of concern in the product, or perform a complex “Alternatives Analysis” to retain the chemical in the product.

As widely expected, the initial “Priority Products” list targets children’s foam padded sleeping products containing the flame retardant Tris(1,3-dichloro-2-propyl) phosphate (TDCPP or Tris), such as nap mats and pads in soft-sided portable cribs, infant travel beds, portable infant sleepers, playards, play pens, bassinets and nap cots.

In addition, the initial “Priority Products” list targets all paint and varnish removers, paint and varnish strippers and surface cleaners that contain methylene chloride.  Spray polyurethane foam systems containing diisocyanates, both professional and consumer grade, are also proposed to be subject to regulation.  Such products are used for insulation, roofing, sealing and filling of voids and gaps.

TDCPP, methylene chloride, and toluene diisocynate are known carcinogens and exposures to the chemical to Californians above the no significant risk level require a warning under Proposition 65.  TDCPP was recently listed in October 2011 as a chemical regulated by Proposition 65.

The announcement of these three product groups as proposed “Priority Products” does not trigger any duty on product manufacturers until the DTSC finalizes the list of priority products by adopting regulations.  However, manufacturers of children’s foam padded sleeping products containing TDCPP, spray polyurethane foam systems containing diisocyanates, and paint and varnish strippers and surface cleaners containing methylene chloride are well advised to be proactive and take steps to determine whether the chemical can be removed from their products or replaced with a safer alternative chemical.

Conkle, Kremer & Engel regularly assists businesses to develop plans to ensure compliance with California’s ever-changing regulations, including the Safer Consumer Products Regulations and Green Chemistry Initiative.

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Protecting Your Company When a Top Executive Leaves to Join a Competitor

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What do you do when a key member of your team goes to work for a rival firm? Or, perhaps worse, how do you react when you receive a competitor’s demand that your latest hire, a new sales manager, stop working for you?

John Conkle recently participated in a discussion of experienced practitioners which looked at these and related topics at the 2014 American Bar Association (ABA) Section of Litigation, Corporate Counsel Committee’s Continuing Legal Education Seminar held in Rancho Mirage, California. The topic of the presentation was what actions inside and outside counsel need to take when a top executive of the company leaves to joins a competitor, when the company’s reputation, confidential information, and business could all be at risk. The panel addressed practical and legal strategies to help navigate the pitfalls presented by this high-stakes dilemma.

Protecting Your Company - ABA 2014

John was joined on the panel by the Hon. Gail Andler, Judge of the Orange County California Superior Court; Elizabeth K. Deardorff, Associate General Counsel of Hewlett-Packard Company; and Steven A. Weiss, of Schopf & Weiss LLP, a Chicago litigation boutique firm. More than 300 attorneys from law firms and law departments throughout the United States and from several foreign countries attended this year’s seminar.

Written materials distributed at the seminar included an article written by John and Bill Garcia, Director of Legal Project Management at Thompson Hine LLP:    First Response to Surprise Departure of Top Executive to Marketplace Rival.  The article outlines first response actions to be taken by counsel in response to an executive’s departure. Bill Garcia had been scheduled to moderate the panel, which he helped conceive and orchestrate, but he was unfortunately snowed in and unable to leave Washington, D.C.

Losing a key executive to a competitor can be a serious and sensitive matter. CK&E is well versed in the options available to a company whose top executive leaves. CK&E has also represented the interests of the company acquiring the executive and employs various strategies and defenses to help resolve disputes over such hirings. CK&E lawyers have represented both sides of these issues, from recruitment of an entire sales team to competition by a former owner of an acquired business or product line.  CK&E’s vast experience in the area of employment law, non-competition and protection of trade secrets allows the firm to efficiently assist in-house counsel to reach a desired objective with a minimum of business disruption.

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Organic products? Really?

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Are your personal care products really organic? There is no federal regulation of cosmetics sold as “organic,” other than a voluntary USDA certification process, but California takes use of the term “organic” seriously.

The California Organic Products Act (COPA), requires that multi-ingredient cosmetics labeled or sold as organic contain at least 70% organically produced ingredients.  The Center for Environmental Health (CEH) sued 40 cosmetics manufacturers in 2011 and 2012 in Alameda County for violating COPA. One of the defendants in CEH’s first lawsuit was Todd Christopher International, dba Vogue International, (Vogue) the manufacturer of Organix brand products.  While the Organix products contained less than 10% organic ingredients, Vogue contended that the “active” ingredients in its products were organic.  Vogue argued that COPA did not apply to its Organix hair care products because hair care products are not “cosmetics” and that “Organix” is not a grammatical variation of the term “organic.”  The court rejected Vogue’s arguments.  In September 2012, Vogue agreed to either change its packaging and stop using “Organix,” or change the ingredients of its products to comply with COPA.

CEH then brought another lawsuit against Vogue.   This time, it was a class action aimed at stopping Vogue’s use of “Organix” nationwide – not just in California.  CEH claimed that Vogue’s labeling is unfair and deceptive under each state’s consumer protection laws because Vogue’s Organix products are not composed of predominately organic ingredients.  In October 2013, the federal court for the Northern District of California preliminarily approved a settlement of the class action in which Vogue would pay $6.5 million and stop using “Organix” for cosmetics that did not contain at least 70% organic ingredients.  The final approval hearing is set for April 3, 2014.  Vogue has already begun to transition its packaging and advertising to the more defensible “Ogx”.

Conkle, Kremer & Engel stays current on federal and state regulatory issues and helps its clients avoid the kind of labeling problem that befell Vogue.

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The Conkle Firm Presents Hot California Regulatory Compliance Issues in New York

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Conkle, Kremer & Engel attorney John A. Conkle was the featured speaker at a special presentation given on February 11, 2014 in New York, New York to business executives and lawyers.

The presentation, entitled “Are Your Products California-Bound?  Dealing With California’s Unique Regulatory Schemes,” provided valuable information about and insight into such California regulatory laws and initiatives as:

  • Proposition 65 (California’s Safe Drinking Water and Toxic Enforcement Act of 1986)
  • California Safe Cosmetics Act
  • California Green Chemistry Initiative (the Safer Consumer Products Regulations)
  • California Volatile Organic Compounds (VOC) Regulations
  • California Organic Products Act (COPA)
  • California Consumer Legal Remedies Act (CLRA)

California’s vast and ever-changing regulations pose a challenge for businesses no matter where they may be located.  Any business manufacturing, distributing or selling products into California needs to comply with California’s regulatory schemes to stay out of difficulty with the California Attorney General, regulatory agencies, non-governmental organizations (NGOs), bounty hunters, putative class action plaintiffs and even competitors.

CK&E was honored to team with the New York-based law firm Gottlieb, Rackman & Reisman, P.C., which specializes in intellectual property, to provide this presentation. CK&E has worked with the Gottlieb firm for nearly 25 years on matters of common interest to our clients. CK&E’s active regulatory compliance practice has helped clients in numerous industries – including  such diverse areas as personal care products, alcoholic beverages, construction and recreational equipment.

 

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CK&E Attends ISSE to Help Beauty Industry Clients

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Conkle, Kremer & Engel attorneys recently attended the International Salon and Spa Expo (ISSE).  Held annually in Long Beach, California in January, ISSE is the biggest beauty expo on the West Coast, and attracts hundreds of beauty industry companies from around the world.  ISSE is sponsored by the Professional Beauty Association (PBA).

CK&E attorneys attended ISSE to meet with beauty industry clients, and to stay abreast of the latest trends and developments in the industry.  Attending trade shows helps CK&E maintain its unparalleled legal expertise on such matters as intellectual property protection, manufacturer-distributor relations and government regulatory and compliance issues that affect personal care product companies.

One highlight of this year’s ISSE was the launch of Glycelene, a line of natural, organic and vegan beauty ointments by CK&E client Borio Beauty.  Glycelene was named to PBA’s “Hot List” of products.  As part of CK&E’s  practice of assisting emerging companies for costs reasonably scaled to their needs, resources and business plans, CK&E helped to protect the Glycelene brand from its inception by initiating federal trademark registration and consulting on the packaging.

The breadth and depth of CK&E’s industry experience allows the firm to accomplish client objectives efficiently and effectively.  CK&E continuously builds on its decades of experience representing client interests in every facet of the personal care product industry by continuing to stay up to date on all matters of concern to its industry clients.

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National Article Profiles the Conkle Firm’s $6.2 million Judgment for Unpaid Sales Commissions

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Conkle, Kremer & Engel’s $6.2 million judgment against an electronics manufacturer is the subject of a feature article in the monthly publication of Manufacturers’ Agents National Association (MANA).  The article, Fallout From an Oral Contract, appears in the January 2014 issue of Agency Sales Magazine.

The article profiles Plaintiff Peter Reilly, a sales representative who was denied his commissions.  Author Jack Foster chronicles how CK&E lawyers Eric S. Engel and H. Kim Sim marshaled the facts and developed the law of the California’s Independent Wholesale Sales Representatives Contractual Relations Act to win a treble damages judgment for Mr. Reilly.

The Independent Wholesale Sales Representatives Contractual Relations Act is a little-known statute that requires a signed written contract containing specific terms in some commission agreements between manufacturers and sales representatives.  A willful failure to have a written contract that complies with the Act, or to account for and pay commissions as required by the written contract, can result in an award to the sales rep of three times the amount proved at trial, in addition to attorney fees.  In the Reilly v. Inquest case, the jury awarded the sales representative $2.1 million for unpaid commissions, which was trebled by the Court to more than $6.2 million.

The California Court of Appeal affirmed the award in full.  The Reilly v. Inquest Technology decision was unprecedented, because it is the first published decision to endorse the full scope of remedies available under the Independent Wholesale Sales Representatives Contractual Relations Act.

The Agency Sales Magazine article follows an article about Reilly v Inquest that appeared in the Los Angeles Daily Journal.

CK&E’s lawyers are well versed in issues affecting manufacturers and sales representatives.  CK&E lawyers litigate and resolve disputes over sales commissions and terminations, and use that knowledge to help manufacturers and sales representatives draft more effective contracts.  CK&E is a member of MANA and the Electronics Representatives Association (ERA).

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CK&E Attorneys Speak at ERA Owners Forum

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CK&E attorneys Eric Engel and Kim Sim were pleased to be invited to speak at ERA So Cal’s January 28, 2014 Owners Forum.  ERA is the international association of professional sales representatives and electronics industry manufacturers who use independent sales reps.  ERA’s member rep firms sell more than $40 billion annually in electronics products for thousands of manufacturers.

The ERA roundtable forum included lively and thoughtful questions and comments by business owners and managers, directed toward improving their ability to collect commissions owed for their sales representatives’ work promoting sales for manufacturers.  In addition to outlining important terms that should be included in written contracts, much of the discussion concerned the application of the Independent Wholesale Sales Representatives Contractual Relations Act, California Civil Code §§ 1738.10 et seq.  Under the Act, a manufacturer must have a signed written contract with the sales rep containing particular terms required by the Act, and the manufacturer must provide a written accounting with every payment of commissions.  When a manufacturer willfully fails to comply with the requirements of the Act, the sales rep is entitled to three times his or her unpaid commissions and other damages, plus attorney fees.

Eric Engel and Kim Sim were the trial attorneys in Reilly v. Inquest Technology, the first precedent in California that enforced the full remedy of treble damages under the Act.  In Reilly, application of the Act led to a $2.1 million jury verdict becoming a judgment for $6.2 million, plus attorney fees and interest.  ERA and its partner organization, Manufacturers’ Agents National Association (MANA), were important sponsors of the Act and similar legislation enacted in about 36 other states to protect the rights of independent wholesale sales representatives.  CK&E is proud to be able to help sales representatives create contracts that protect their rights to be paid for their services, and to help them enforce their rights when disputes arise.

 

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Safe Cosmetics Act Database to Go Public in 2014: Watch for More Lawsuits

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In a previous blog post, we referred to the Safe Cosmetics Act as a “sleeper” because it has been in existence for several years but has been little noticed and seldom used.  That is likely to change in 2014.

The Safe Cosmetics Act was enacted in 2005 and became effective January 1, 2007.  Businesses manufacturing cosmetics sold in California were required to make their initial report to the California Department of Public Health by December 15, 2009.  Reporting must be made on a continuous basis, such as when formulation changes add a “suspect” chemical to an existing cosmetic product.  The Safe Cosmetics Act is so little-known that many manufacturers may have missed the reporting requirements, or complied as to some products but failed to update their reporting as product formulations changed.  So far, those omissions have rarely had any significant impact on manufacturers, but that is likely to start changing now.

The relative quietude may change in 2014 because by December 31, 2013 the CDPH must make a publicly accessible database available on its website containing all of the information collected pursuant to the Safe Cosmetics Act.  The information included in the database could be used by enterprising Prop 65 bounty hunters searching for products that contain chemicals that are subject to the warning requirements of Prop 65.  And the failure to report required information timely or accurately may be the basis for future unfair competition lawsuits by private parties, including consumers and competitors.

As a harbinger of the potential consequences for manufacturers, in January 2012 the California Attorney General’s Office announced the first law enforcement action taken under the Safe Cosmetics Act against a manufacturer of “Brazilian Blowout” products.  But the manufacturer’s failure comply with the Safe Cosmetics Act’s reporting requirement was only one of many business acts and practices alleged to violate California’s Unfair Competition Law.  The Attorney General also alleged violations of California’s False Advertising Law and Proposition 65.  The end result was a consent judgment that required the manufacturer to pay $300,000 in attorneys’ fees and costs and an additional $300,000 civil penalty for violation of Prop 65.  The manufacturer was also subject to numerous injunctions, including a requirement that it report in compliance with the Safe Cosmetics Act.  Private claimants such as Prop 65 bounty hunters are likely to take notice of the newly available information and any failures to comply.

Conkle, Kremer & Engel stays up to date on regulatory compliance matters to provide continued expert legal guidance to clients.  Conkle, Kremer & Engel has decades of experience representing clients in the personal care products and cosmetics industry, and understand the unique regulatory compliance concerns facing manufacturers, distributors and retailers.

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Prop 65 Notices and Lawsuits Target Cocamide DEA

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Cocamide DEA (coconut oil diethanolamine condensate) is a common ingredient in personal care products.  It is a viscous liquid used as a foaming agent in shampoo and soap products and as an emulsifying agent in cosmetics.  It can be found in shampoos, liquid soaps, body washes and bubble baths, among other products.  In June 2012 Cocamide DEA was added to the list of Proposition 65 chemicals, and warning requirements took effect one year later, on June 22, 2013.  To date, Notices of Violation concerning cocamide DEA exposure have been served on more than 350 businesses, and public enforcers have filed at least 16 lawsuits, most of them naming numerous defendants.  Lawsuits have been filed in both Los Angeles and Alameda Counties.

Proposition 65 is California’s right-to-know statute that requires businesses to provide clear and reasonable warnings before exposing Californians to a wide range of chemicals known to cause cancer or reproductive harm or both.  Proposition 65 requires a 60-day Notice of Violation to be served before public enforcers may file a lawsuit for alleged violation of the law.  The public enforcers who have served Proposition 65 Notices of Violation with respect to exposure to cocamide DEA include Center for Environmental Health, Shefa LMV LLC and ProtectConsumers LLC.  In addition, a number of individuals have become involved in Proposition 65 enforcement actions concerning cocamide DEA.  These individuals – Mark Lewis, Crystal Gerard, Mark Bates, Natisha Meloncon and Latonia Edge – are all represented by The Law Offices of Morse Mehrban.

2013 has been a particularly difficult year for manufacturers, distributors and sellers of personal care products.  In addition to cocamide DEA, other chemicals commonly found in personal care products and cosmetics became subject to Proposition 65 enforcement in 2013, including benzophenone and diethanolamine.

Businesses should carefully review the contents of the products they manufacture or distribute to determine whether those products may contain cocamide DEA.  Notices of Violation followed by prompt lawsuits have become the norm for alleged exposure to cocamide DEA.  Businesses must be proactive in protecting themselves from Prop 65 bountyhunters.  CK&E regularly helps clients with Prop 65 compliance issues.  If a Notice of Violation is received, CK&E handles responses to Notices of Violation and defense of businesses in Prop 65 actions to help resolve claims as efficiently and economically as possible.

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