Siding with record labels and movie studios, the Supreme Court has held that peer-to-peer file sharing companies, such as Grokster and StreamCast can be held liable for contributory copyright infringement if their customers engage in illegal file-swapping while using their products.

Writing for the majority, Justice Souter summed up the decision in this way: “We hold that one who distributes a device with the object of promoting its use to infringe copyright, as shown by clear expression or other affirmative steps taken to foster infringement, is liable for the resulting acts of infringement.”

The Court was careful not to overturn its decision in the 1984 Sony Betamax decision. In that case, which addressed whether Sony could be held liable for creating a recording device that allowed third parties to infringe copyrighted works, the Court held that a company could not be held liable under a theory of contributory or vicarious copyright infringement for selling recording devices so long as the device had substantially non-infringing uses. Justice Souter noted that, in the Sony case, and the cases that followed, the creators of the technology were not actively encouraging illegal behavior. The Court underscored that the holding in the Sony case did not give companies a free pass on liability; in fact, the standard was that a product had to have a substantially non-infringing use, in order to avoid liability.

In the current case, wrote Souter, the evidence showed that Grokster and StreamCast made no efforts to put in place anti-infringement measures and in fact, seemed to be “aiming to satisfy a known source of demand for copyright infringement, the market comprising former Napster users.”

The court was careful to craft a decision that did not implicate any new technologies that might have the potential to foster illegal activity. Indeed, the ruling clearly suggests that technology alone is in sufficient to impute liability to a manufacturer. In short, the standard must involve technology-plus in order for liability to be found.

The Constitutional Court in South Africa has ruled that Laugh It Off productions made fair use of liquor giant’s BLACK LABEL trademark as parody when it created a similar looking label that read BLACK LABOUR WHITE GUILT to sell on t-shirts.

SABMiller, one of the largest brewers in the world, manufactures Carlings Black Label Beer. It found Laugh It Off’s add offensive and racially charged and asserted a claim of trademark infringement against Laugh It Off, alleging tarnishment of its polular brand. After losing at the lower court level, the Constitutional Court in South Africa ruled — in a first of its kind case — that Laugh It Off was not liable for trademark infringement.

Let’s hear it for free (and marginally funny) speech.

The FTC announced that it has reached a settlement with the makers of Tropicana Orange juice (Pepsi) for unsubstantiated claims about the ability of Tropicana Healthy Heart juice to decrease the likelihood of stroke and heart disease.

The juicy details: From 2002 until early 2004, Tropicana ran commercials on television and in magazines for its Healthy Heart orange juice. The ads claimed that by drinking 2 to 3 glasses a day, consumers could lower their systolic blood pressure by 10 points and increase their HDL cholesterol (the good one) by over 20%, all of which would lead to a decrease in likelihood of stroke. According to the FTC, Tropicana had no scientific evidence that the claims it was making were actually true. In peeling back the skin on Tropicana’s claims, the FTC charged that the studies pointing to these dramatic results did not actually prove Tropicana’s assertions.

Under the pithy terms of the settlement, Tropicana can no longer make claims relating to its orange juice increasing HDL cholesteral, lowering blood pressure, or contribution to a reduction in stroke unless it can scientifically substantiate its claims.

Practice Pointer Clients should be advised that all claims that do not amount to mere puffery must be substantiated with methods that may be easily replicated. Two independent scientific studies is considered good evidence of a claim.

Effective July 1, 2005, Florida will relax its requirement that sweepstakes rules be printed in their entirety on every advertisement showcasing the promotion.

Prior to the enactment of this modification, under Florida Statute 849.094, advertisers were required to print the full entry rules in each an every advertisement that promoted a sweepstakes, even when the ad was quite small, such as in a magazine. Under the modification, Florida will now allow advertisers to print just the “material” elements of the contest, so long as there is a mailing address, website, or toll-free number listed for consumers to get a complete copy of the sweepstakes rules.

Both the old and newly modified statute were applicable to sweepstakes (games of chance) where the aggregate prize value was $5000.00 or more, so promotions that award smaller prizes will not be affected by this. Defining what is a material will be subject to administrative hearings, but in all likelihood, material disclosures will include the dates of the sweepstakes, to which residents the promotion is open, the prizes (and odds, if known), and the age of entrants.