At attorney in New York is seeking class action status in a lawsuit filed against Starbuck’s for its coupon campaign that closed early after the tell-a-friend response got out of hand. The Starbucks chain offered its employees an email coupon for a free cup of coffee and allowed the employees to pass the coupon onto friends and family. Evidently having not learned from Napster, within hours, the friends and families contacted numbered in the thousands, and Starbuck’s, inundated with coupons, was forced to shut down the promotion early.

New York attorney, Peter Sullivan, sued. According to the Orange County Register, he believes that “Starbucks should account to the thousands of consumers who relied upon the advertisement, went out of their way to stop by a Starbuck’s and ended up being charged $3.00 for coffee.”

Hardly a “bait and switch” in this attorney’s opinion, (the measure by which a jury is likely to judge the Starbuck’s debacle), Starbuck’s may be able to show that it was merely an honest mistake and a good deed that got out of hand. Moreover, it’s not likely that all that many people went out of their way to get the free drink, considering there’s a Starbuck’s on most corners. Still, it would have been wise for the coffee chain to attach certain restrictions on the coupon.

Practice Pointer:
Viral marketing coupons are popular and companies endeavoring to use them should take certain precautions to insure that it is not overwhelmed with responses. Some examples are as follows:

The FTC is getting serious about children’s privacy. According to the FTC website, xanga.com (and its pricipals, Marc Ginsburg and John Hiler) agreed to pay a whopping $1 Million in civil penalties for violating the Children’s Online Privacy Protection Act (“COPPA”).

According to the FTC, the xanga site allowed users under the age of 13 to sign up for a free account, despite the proscription on the sign-up page. Xanga failed to secure parental permission from those users, even when they used a birthdate that clearly made them underage.

Practice Pointer:
Many companies mistakenly believe that they are in compliance with COPPA guidelines if their content is adult directed or if they post a statement that no one under 13 is allowed to register on the site. In fact, companies may be in violation of COPPA in the following situations:

As the FTC continues to crack down on social sites, the fnes and corrective measures (including scrapping an entire mailing list) that the FTC will require will continue to increase. If you are uncertain whether you should be in compliance, contact us

The District Court of Nevada has found that Adrenaline Sports’ use of the mark WHAT HAPPENS IN VEGAS STAYS IN VEGAS infringes the use by The Las Vegas Convention and Visitors Authority (”Convention Authority”) of the slogan WHAT HAPPENS HERE STAYS HERE.

In December of 2002, the Convention Authority launched its “Vegas Stories” advertising campaign. All of the commercials ended with a display of the words WHAT HAPPENS HERE STAYS HERE. In April of 2003, defendants began using the mark WHAT HAPPENS IN VEGAS STAYS IN VEGAS and obtained a Nevada state registration for the trademark.

In looking at all the Sleekcraft factors, the court found that while the marks are not identical, the terms “here” and “in Vegas” are interchangeable, particularly in light of the fact that in this case, both phrases relate unequivocally to Las Vegas. “Consumers who purchase Defendant’s clothing are not likely to stop and consider the difference between ‘Here’ and ‘In Vegas’ before deciding the purchase such clothing.” Thus, even though other factors (including the marketing channels for the two marks) are distinct, the similarities in the marks coupled with the level of care a purchaser might expend in buying schwag, confusion was likely.

The Children’s Advertising Review Unit (“CARU”) determined that the advertising, aired on Nickelodeon, for a new SpongeBob SquarePants DVD violated the CARU Advertising Guidelines prohibiting advertising placement of a product during the show that features the same characters. Nick was quick to remove the problematic ad placement, noting that human error was the culprit.

Advertisements placed during a show, or directly adjacent to a show, which showcase the subject of the show, tend to lead children to the conclusion that the character (in this case, SpongeBob) is endorsing the product. CARU believes this sort of advertising is unfair to children (and parents).

The 9th Circuit affirmed a lower court decision that Plaintiff’s screenplay The Funk Parlor” was not infringed by the HBO television series “Six Feet Under: The court found that while at a general level, elements of the two shows were similar, the devil was buried in the details.

The court found that both stores took place in a funeral home and began with the death of the family patriarch. Both stories also share a male character who comes home to help run the business after the death, and both stories have family members who end up in strange love relationships, including a character in each screenplay who is romantically involved with her brother.

Notwithstanding these similarities, the Court found that the themes of the stories are vastly different. Moreover, in looking at the setting, mood, and pace of the stories, the Court found significant differences, too.

In finding no copyright infringement, the Court held that the plaintiffs rely heavily on scenes a faire in their argument and do not focus on the actual elements of the story that are unique.

Barney parodist Stuart Frankel, a doctor with a lot of free time, has filed a declaratory relief action against Lyons Partnership, the creators of the lovable character Barney, the Purple Dinosaur. The action, filed in the Southern District of New York, seeks a declaration that Frankel’s website, Stuart Frankel’s Very Small Webpage does not infringe any protected copyright or trademark related to Barney.

The website portion in question pokes fun at the Barney and Friends television show, claiming that Barney leads a double life and in fact is an evil demon. Sources who watch The Barney Show regularly have confimred that this information is not contained in the actual show (notwithstanding the fact that all sources were under the age of four, we stand by the voracity of these statements).

According to the suit, filed in late August of this year, Plaintiff received several threatening letters from Lyons attorney, demanding he cease operating the site or risk legal action. Notwithstanding Plaintiff’s responses — through his counsel — that Lyons attorney speak directly with counsel and stop sending letters to him, the letters kept coming, in form-letter style, directly to Plaintiff. The letters alleged that Frankel had infringed the BARNEY trademarks and copyrights and threatened to have Frankel’s website taken down as a result.

While trademark law does acknowledge parody as a partial defense, it is not a complete defense. The measure of whether a third party’s use of a trademark is fair will be determined under the same standard as any trademark infringement suit, namely, whether the relevant class of consumers believes that there is any affiliation with or sponsorship by the relevant class of consumers. The content of the web page — much like a “sucks” website — seems to establish that Stuart is not a fan of the cuddly character.

From a copyright perspective, parody constitutes a fair use and a complete defense to copyright infringement. Given that the site is non-commercial, and the images of Barney are limited to two, both of which are probably necessary to establish the parody, the plaintiff may well get his wish, but one thing’s for sure: he won’t be a guest on the “Let’s Have Fun with Manners” episode.