Since its release in March, 2013, “.com Disclosures” is the new hot read among ad law geeks and insomniacs, but it should be on the desk of every mobile and digital marketing executive in America. The FTC is taking the hard line when it comes to disclosures on electronic and tiny screens, and failure to act could result in some one-on-one time with FTC.

Acknowledging digital advertising – particularly mobile advertising – often has space constraints, the FTC nevertheless is tightening the reigns on disclosures in them. Its new guidelines clearly suggest the FTC means to uphold the mandate of Section 5 of the FTC Act (the “Act”), regardless of the medium.

The new dot com guidelines are not a rewrite of the Act; the rules are the same. They are a clear acknowledgement, however, that digital advertising is not immune from the Act’s proscription on deceptive ads or practices, that digital advertising can be more deceptive than other forms of advertising, and that advertisers are going to have to take care not to ignore their obligations. Perhaps most importantly, the new guidelines serve as an advertising roadmap for how the FTC will review digital advertising pursuant to investigations relating to false advertising. As the advertising world balances space constraints and digital advantages of using certain media with its obligation to make disclosures and disclaimers clear and conspicuous, the new guidelines suggest the FTC is closely watching.

Online advertisers have long been engaged in the practice of placing disclosures and disclaimers below the initial window seen by a consumer, the area colloquially known as “below the fold.” While the new guidelines acknowledge practical considerations may require disclosures to be in inconvenient locations, it’s clear the FTC will be scrutinizing the distance between the claim and any disclaimer. Similarly, the FTC has taken into account flash technology, making clear it will examine whether other parts of an ad are designed to “distract attention for [from?] the disclosure,” even with the requisite information present.

The FTC understands the consuming public is no longer viewing digital content on the large screens on their desktops and laptops, but rather has migrated to handheld devices, such as tablets and smartphones. The guidelines make clear advertisers are required to consider the medium, eliminating an advertiser’s defense that its disclosure was present but designed for a bigger viewing screen.

When space constraints do not enable the advertiser to place the disclaimer or disclosure near the ad claim, the FTC will be looking for a conspicuous link in close proximity to the claim. The guidelines go on to identify that this link must convey the importance of the information contained in it, must be as close as possible to the relevant ad claim, and must be in a style that conveys it is an actual link to more information. In fact, the new guidelines specifically require that – no matter how it’s done – the disclosure must be displayed before the consumers makes a decision to buy. By example, it states “before they ‘add to shopping cart.’”

None of the foregoing should surprise advertisers, given the Act’s longstanding requirement that consumers have reasonable access to information they need to make an informed decision, but the FTC is going further, taking advantage of technology’s ability to provide advertisers with consumer behavior information: the guidelines require monitoring of any linked information to determine whether the placement is effective. We can infer from this new direction that the FTC’s tolerance for advertiser excuses is waning, and it will be looking to linked disclaimer feedback as a determinant of intent to deceive.

Closing the door on, “but judge, I had no choice but to leave out the disclaimer,” the new guidelines make clear that if an disclosure is needed to clarify the ad and it cannot be practically displayed, the ad should not run. Period.

The digital frontier is meeting the industrial age. Advertisers have long been able to take advantage of ambiguous loopholes as they related to the ad-technology space, but the door seems to be closing on defenses to misleading the public. Advertisers will continue to hawk their wares online, to be sure, but the arbitrage opportunity window is narrowing.

After filing over 275 lawsuits in almost 18 months, it seems as though Righthaven, LLC (“Righthaven”) may have run out of steam.

Righthaven, a Nevada holding company, was founded in early 2010, for the sole purpose of filing copyright lawsuits on behalf of its clients, news content owners (such as Stephens Media).  Its methods involved Righthaven scouring the Internet for republication of news articles and photos, suing the website hosting the infringing content (seeking monetary damages and the transfer of the infringer’s domain name), and then extending a settlement offer. Lawsuits filed by Righthaven have been brought against a wide variety of online publishers, including bloggers, political campaigns, nonprofits, and website operators — almost always without notice or DMCA takedown. Many cases settled swiftly, totaling an estimated $400,000 in aggregate settlement payment.  Righthaven’s founders claim they created the company in order to fight and deter “copyright theft” by bloggers and news aggregators online. Their aggressive enforcement strategies, including suing noncommercial bloggers and nonprofits who cannot afford to litigate, have also garnered much criticism, particularly from the Electronic Frontier Foundation. The critics have described the company as a “copyright troll” and a “settlement factory.”

In the past few months, Righthaven has suffered serious setbacks in the courts. In Righthaven v. Realty One Group, Inc. (D. Nev. Oct. 19, 2010), Righthaven sued a blogger for republication of 8 sentences from a 30-sentence Las Vegas Review-Journal article.  In a rare decision, the court granted the blogger’s fair use defense on a motion to dismiss.  The court noted that the blogger quoted a small percentage of the source article and his “use of the copyrighted material was likely to have little to no effect on the market for the copyrighted news article.” Another example is Righthaven v. DiBiase (D. Nev. April 15, 2011) in which Righthaven sought to have DiBiase’s domain name transferred to them.  In this case, the Court rejected transfer of the domain name stating that “Congress has never expressly granted plaintiffs in copyright infringement cases the right to seize control over the defendant’s website domain.”

Most notably, Righthaven suffered a particularly hard blow recently in Righthaven v. Democratic Underground (D. Nev. June 14, 2011).  In that case, the agreement between Righthaven and its clients, called a “Strategy Alliance Agreement,” was unsealed.  The agreement purported to assign copyrights to Righthaven for the purpose of filing infringement lawsuits, while exclusively licensing back all rights to the client, with Righthaven maintaining no rights, except the right to use. The judge dismissed the lawsuit on the ground that Righthaven had no standing to sue, stating that a “copyright owner cannot assign a bare right to sue,” essentially rejecting Righthaven’s business model. Over three-dozen other cases filed by Righthaven are being held up on appeal over the same issue.

Is it the end of Righthaven?  Most signs point to yes.  In the past two months, Righthaven has stopped filing new lawsuits, let cases lapse due to procedural defects and laid off a number of employees. Steve Gibson, CEO of Righthaven, stated they are awaiting the outcome of numerous appellate rulings in the Ninth Circuit Court of Appeals before resuming their efforts.

Regardless of what happens to Righthaven, this line of cases is particularly instructive in at least three ways:  first, they have allowed the emergence of blog-specific copyright cases and an expansion of the fair use doctrine, which Righthaven intentionally helped create (See Cobalt’s prior post on the topic: The Emerging Blog Specific Copyright Cases). Second, these cases are illustrative of how copyright owners from the traditional news world are continuing to struggle over how to best protect and monetize their content. Finally, the cases raise particularly interesting questions of copyright law relating to standing to sue and the validity of copyright assignments, for which we are awaiting clarification from the Ninth Circuit

Joe Esposito, who blogs at “Scholarly Kitchen”, has a knack of distilling the influx issues in the tumultuous world of publishing. This most recent blog post is particularly helpful in making sense of the upheaval and seeing some patterns emerge.

To quote a bit:

“While one would be hard-pressed to find any publisher who does not view digital media as a central strategic concern, we have reached a critical point in the evolution of publishing – henceforth, no one who starts a new publishing company is likely to be thinking of the world of print.

New publishing entities from here on are almost certainly going to be Born Digital.
This is a big shift because print is, well, more than print; it’s also an entire ecosystem that has grown up around print. That means no more looking back to see which legacy customers can be grabbed, no fidelity to old partners or ways of doing business.”

And he then gives a useful comparison of the playbooks of the two: Digital Born and Born Again:

“… Compare the playbooks of the Born Again and the Born Digital publishers:

• Identifying A New Market. While Born Again publishers pay lip service to the idea of finding a new market, for the Born Digital, a new market is essential, as it puts them beyond the reach of the established and powerful marketing capabilities of the Born Again. In scholarly communications, one form this takes is the identification of new sources of purchasing power adjacent to legacy purchasers. For example, a Born Again publisher may concentrate on selling materials to academic libraries, while a Born Digital publisher may seek to cultivate faculty as customers.

• Thinking Globally. Although this is not a new outlook for journals publishers, many book publishers continue to operate on a national basis. This requires them to find a sufficient audience in their own territory, whereas a global program can bring in customers from many areas, thus making it easier to get to break even. Both Born Again and Born Digital publishers alike pursue global strategies today, but the Born Digital publisher has the advantage, as its global strategy is unimpeded by relationships forged in the print era.

• Selling Direct. The print world is full of intermediaries, from wholesalers to libraries that stand between a publisher and the end-user or reader. These intermediaries provide an essential role for print. But with low-cost digital distribution, disintermediation becomes possible. It’s much harder for a Born Again publisher to sell direct, as direct sales put a publisher into conflict with established distribution channels. A Born Digital publisher, on the other hand, has no legacy customers and thus no conflict.

• Using Pricing to Disrupt Legacy Expectations. As noted above, aggressive pricing can hamstring larger and better-resourced established publishers regardless of how forcefully they are pursuing their Born Again strategy. Born Again publishers typically try to charge as much as the market will bear, but Born Digital publishers will often charge the minimum necessary in order to build market share. A strategy based on price works best in direct-to-consumer markets.

• Identifying New Fields. This is an editorial issue: What are the growing areas to work in? Some fields are well-established and not likely to make room for newcomers. New fields may also be small and not deliver the return on investment that the Born Again publisher requires. But for the Born Digital publisher, all the negatives associated with a new field are transformed into positives, as there is not likely to be competition from established publishers.

• Investing in Print Infrastructure. Instructive is the example of Born Digital OR Books, founded by two veterans of trade publishing. OR (named for founders John Oakes and Colin Robinson) uses digital technology to bring books to market rapidly and has a network of suppliers for print on demand, but when an OR title gets hot and can benefit from the legacy distribution channels of trade publishing, the company licenses rights to established trade houses.

• Sizing the Organization. Born Digital publishers try to stay as small and lean as possible, as this gives them flexibility and the ability to underprice established publishers. When Born Again publishers attempt to attack their cost structure, they often fail, as they may cut out essential services that their legacy customers have come to expect from them.”

That 2011 is going to be an accelerated shake-up to the Born Again and the Digitally Born is a certainty.

Hard to believe that the last California statute prohibiting impersonation dates back to 1872. SB 1411, a bill passed last June, updates the law and makes malicious “e-personation” a misdemeanor punishable by up to a $1,000 fine and a year in county jail. It is codified at Penal Code Section 528.5.

More specifically, the new law makes unlawful to “knowingly and without consent credibly impersonate another actual person through or on an Internet Web site or by other electronic means … for purposes of harming, intimidating, threatening, or defrauding another person.” Emphasis Added. In addition to criminal penalties, the law expressly provides ground to bring a civil suit for compensatory damages, injunctive relief or other equitable relief to anyone who suffers damage or loss as a result of the online impersonation. Other states (like New York and Texas) already have similar laws on the books.

Practice Note: Attorneys who represent celebrities and victims of online harassment and identity theft will particularly want to know about this law, which adds to the arsenal of remedies against California impersonators. Also good to know: If you are dealing with imposters on Facebook, MySpace, Twitter, eBay or other prominent sites, you can usually get the fake account deleted fairly expeditiously by using the site’s take-down mechanism. Many sites now have such procedures in place, not only for DMCA purposes, but also to request deletion of abusive or fake pages.

Finally, it is important to note that the new California law only targets “credible” impersonators of an “actual person.” @ChuckNorris_ and @drtobiasfunke are probably safe.

In what many think proves the point that electronic and print publishing will be symbiotic, the E-print publisher, Ravenous Romance, has licensed the P-print publisher Red Wheel the world English rights to twelve Ravenous paranormal romance e-books in trade paperback editions to be retailed at $12.95

Proof perhaps that the ‘subsidiary rights’ clause of the old publishing agreement might better be termed, “outsourced rights”. It will unsettled for awhile as to which is ‘subsidiary’ to what.

Ephemera is by definition written and printed matter that not intended to be retained or preserved. But six years ago the San Francisco couple, Rick and Megan Prelinger, dedicated a new library to ephemera of all kinds and descriptions in the Soma District of their city.

In their webpage, the open handed, unguarded access policy is startling for its clarity and brevity:

“We plan at first to open our library to others when we are there, and develop a model of service based on what we learn of other people’s needs. It will be an appropriation-friendly setting. Scanners, digital cameras, and CD/DVD burners will be available so that visitors can make digital copies of items of interest and take them home. There will be no charge for using the collections, though we are exploring charging for commercial reuse of the materials so as to recover some of our expenses.”

This is an amazing project for many reasons, including the fact that it has such an ‘appropriation friendly’ useable collection.

Rick Prelinger comments that “We have found that the divide between the digital and analog camps is real, but highly exaggerated by the media and by overeager analysts; and that print and electronic materials are evolving in tandem with one another, and that this evolution is retroactive as well.”

Making a home for the unwanted paper text has been the work of Aaron Lansky in salvaging Yiddish language publications at the National Yiddish Book Center in the 1980′s. His book “Outwitting History” is an engaging tale of how the acquisition program was born and evolved.

One wonders if the Google Library Project has plans to help these who are rescuing ephemera print from destruction.

We learned yesterday in the New York TImes written by Miguel Helft that Google is harvesting metadata and data from the Google Library Project to create the largest translation engine in the world. As Google has an edge of pattern recognition software to generate metadata, perhaps we will see the next Google project to expand to these libraries of salvaged analog text.

“Like its rivals in the field, most notably Microsoft and I.B.M.,
Google has fed its translation engine with transcripts of United
Nations proceedings, which are translated by humans into six
languages, and those of the European Parliament, which are translated
into 23. This raw material is used to train systems for the most
common languages.”