Chapter 16

Unfair Competition, Publicity, and Privacy: Filling in the Holes

We have just been through a tutorial on trademarks and copyrights. However, as one radio commentator teases, “now here's the rest of the story.” Copyrights and trademarks are the core issues in content, but you cannot overlook an important legal triad: unfair competition, publicity, and privacy.

The Rules of Unfair Competition

Buried in the Lanham Act, the federal trademark law, is a real surprise, a special provision characterized in simple terms as a national unfair competition law. Section 43(a), as it is known, provides that any misrepresentation in commerce is actionable (susceptible to a lawsuit) by someone who is “aggrieved.” That person can be a consumer or a competitor. It covers not only active misrepresentations but also false designations of origin and misuse of names and trademarks. In fact, this rule also functions as the national trademark law for unregistered marks.

When most of the baby boomers were growing up in the 1950s and 1960s, the rule of thumb was this: Don't mention a competitor's brand by name. Comparisons were always between the one household term and Brand X. Then, in the early 1970s, sparked by some lawsuits and the impact of Federal Trade Commission (ETC) rulings, the notion of referring to a competitor's actual mark was encouraged, as long as the representations were truthful. To back up the potential problem of misrepresentations, Section 43(a) became a touchstone for protection.

Little appreciated when it was first passed in 1946, Section 43(a) is now a standard marker in most lawsuits involving trademarks, copyrights, competition, and consumer fraud. Its principles play out in several ways:

• In the media, advertising sparked these initial debates. Comparing one's product with a leading competitor, everything from soap to autos, meant representing one's goods in relation to another's. To determine whether the statements were inflated and permissive puffery or deliberate fraud, Section 43(a) was called into play to help mediate. As the publisher of potential misrepresentations, radio, television, print, and other media outlets must be satisfied that the hype is not fantasy. Although an “innocent publisher” clause can be invoked to reduce the sting of false claims, good publishing practices mean knowing what you are disseminating and being satisfied that extreme claims that identify competitors have a credible rationale.
• Section 43(a) is also a sword in the competitive battles in other marketplaces. If a material false statement is made in connection with a promotion, or if an unregistered trademark is used by a competitor, this provision opens the door to the federal courts. For example, when Stephen King complained that his name was used in promotion and on screen for the film, The Lawnmower Man, he sought action. Even though he sold the film rights to his early storyline, the movie that was finally produced bore no relationship whatsoever to his plot. The only elements in common were the title and the use of Stephen King's name. He sued, successfully, to have his name stripped from the title, and all videocassettes had to be reworked to replace his name in the title. All thanks to Section 43(a).
• The rule is also employed whenever one's name, voice, image, or likeness is taken without consent. Celebrities as diverse as Woody Allen and Jackie Kennedy Onassis have used this provision to challenge look-alikes from mimicking them in advertisements, thereby confusing the public as to endorsement of a product. Tom Waits and Bette Midler have protected their distinctive voices against commercial imitation, and any attempt to imply that Casper the Friendly Ghost is mean to kids could spark an action.

What makes this provision special is its breadth. It relies on the notion that merely presenting a false statement about another in commerce can create a claim by anyone who believes he or she is harmed.

Here is another example. Consumers Union, publisher of Consumer Reports, the monthly magazine that prides itself on unbiased reporting about products, sued under Section 43(a) when an advertiser, Regina Vacuums, used television commercials to tell the world how well Consumer Reports rated its product. From the magazine's perspective, the ad falsely implied it endorsed the product, which could have unfairly damaged its reputation for unbiased reporting. In this way, the law protects entities who are hurt when the public is misled. In the hands of clever antagonists, the provision is a powerful weapon.

But be warned, not every use of a name or image is a violation. If the use is a parody, it may be upheld. When Ginger Rogers sued to stop a movie from being called Ginger and Fred, the court reasoned that there was no impression that the legendary actress was endorsing the film. It was a fair and artistic use of the names to create an image essential to the story of the film. In contrast, Princess Stephanie of Monaco won a lawsuit against a Swiss magazine for a photomontage that showed her and the director of the Swiss national circus in sexy positions, the court having rejected the claim that the montage was a harmless joke.

Another intriguing twist involves the concept of “reverse passing off.” When a spate of charges of plagiarism hit the news in 2001, one involving famed author Stephen Ambrose, another involving Doris Kearns Goodwin, and a third involving a prominent explorer-scientist, Bradford Washburn, each was characterized as writing a book that took too many facts and too much information from prior sources. While the charges involved potential claims of copyright infringement, they also raised issues of reverse passing off—claiming personal credit for someone else's research.

Publicity Protection for the Famous

As if Section 43(a) were not enough to think about, a whole body of rules covers famous people and the use of their names and images. Anyone who is a celebrity or has commercially exploited his or her own name, voice, or likeness may lay claim to this protection. Generally, the rules of publicity are set forth in state statutes. Sometimes, they are found in judges' decisions of fairness or equity. This means consulting the specific rules of the states where you are doing business to confirm what obligations are afoot.

However, if you want to develop content with a national reach, you must adopt an approach that respects the most restrictive rules. These usually apply in states such as California and New York. In general, the following are the key points to bear in mind.

What Is the Nature of the Use?

Is it commercial? Is there any element of public interest, such as news reporting or commentary? Would it qualify for fair use under copyright law? The more public the interest in the content and the less commercial the status, the better is the opportunity to use the image.

Who Is Involved?

Is the person famous? Is he or she recognizable by voice, image, likeness, or rendering? Is the person alive or dead? Is the person a minor? The rules help the famous keep what is theirs, the commercial exploitation of their persona. If the person is recognizable in any fashion, the rules may apply. Even if the person is dead, rights may be held by the heirs. In 2002, the Supreme Court declined to hear a case (Comedy Three Productions, Inc. v. Gary Saderup, Inc.) involving posthumous pictures of the Three Stooges on T-shirts and lithographs, letting stand an appeals court ruling that sided with their heirs, who claimed that their right of publicity outweighed any First Amendment rights of the artist. What is more, Elvis Presley's estate is one of the biggest licensors of images. Watch out especially for minors; unauthorized use of their images can be double trouble.

In short, even though a copyrighted work may be in the public domain and free to use by that set of rules and even though there may be no recognized trademark, the rules of publicity might come into play. The harm from misusing this right can be costly: You may have to pay a penalty, lose a profit, or destroy an infringing product.

Even if the person involved is not famous, there may be another headache.

Right of Privacy for the Less Than Famous

The privacy right is the other side of the coin. Most people have a legal entitlement to anonymity. State rules and common laws protect ordinary folks from

• Intrusion into their private affairs.
• Public disclosure of embarrassing facts.
• Publicly being placed in a false light.
• Misappropriation of a name or likeness.

For those who create content, these rules create some bright cautionary yellow lights. With Minicams capturing images right and left, private people are finding their private lives suddenly public. Unlike the paparazzi's pictures of royalty, photographs of unknowns should be carefully reviewed before publication. Clearance may be needed unless there is a rationale that supports a public purpose. Since talk is cheap and it is common for guests on radio or television to rant and rave about all sorts of things, especially the private lives of unknown people, a wise producer gets a release from every guest and has a ready finger on the so-called kill button when in doubt. The releases should cover not only the right to use the images of the guests but place responsibility on the guests for the accuracy of the aired statements. There is no 100% guarantee against a privacy violation, but the release gives you a firm footing on which to press your case.

The telling of some intimate and private details by the author Arthur Golden placed one of the most popular books of recent time, Memoirs of a Geisha, in an awkward limbo. While more than 4 million copies of the 1997 novel were sold and rights for a film deal acquired by none other than Steven Spielberg, Golden and his publisher became embroiled in a lawsuit with a former geisha. The woman, who recounted many stories to the author in taped interviews, claimed that Golden improperly breached their agreement about confidentiality, revealing her identity while fictionalizing many elements of her life. The case has elements of copyright infringement, invasion of privacy, and defamation as well as breach of contract. Needless to say, it is a complex story in its own right that may take years to unravel.

Privacy and the Internet

A whole new body of law is developing around privacy and the Internet. Because digital data is easy to organize and deliver to others, because servers can be hacked and precious information taken without knowledge of the creator, and because children are primary users of Internet websites, the level of concern about preserving one's privacy in digital communications is at heightened levels. The Children's Online Privacy Protection Act (COPPA) was passed in 1998 in response to a hue and cry, not only about the invasion of children's privacy, but the sadistic exploitation of youths via Internet communications.

COPPA applies to the online collection, after April 21,2000, of personal information (such as full name, home address, e-mail address, telephone number, or any other information that would allow someone to identify or contact the child) from children under age 13. It covers operators of websites or online services directed toward children and other operators who know that they are collecting personal information from children. The law and the implementing regulations promulgated by the FTC spell out what such an operator must include in a privacy policy, when and how to seek verifiable consent from a parent, and what responsibilities an operator has to protect children's privacy and safety online. The operator must post a clear and prominent link to the policy on its home page and at each area where it collects personal information from children. The act directed the FTC to review and approve guidelines proposed by industry groups or others that would serve as safe harbors for compliance with the law. COPPA also authorizes the ETC to bring enforcement actions against violators, and, in fact, the FTC has already done so.

In addition to information about children, other types of information, much of which is collected online, has been the focus of recent legislative activity in the area of privacy; for example, information collected by financial institutions (Gramm-Leach-Billey Act), medical information (Health Insurance Portability and Accountability Act), and information from citizens of the European Union (EU Directive on Data Protection). These disparate laws and regulations have led to a recognition of the need for businesses to establish privacy policies that disclose the nature of the personal information they collect and the use they make of this information, and, in appropriate cases, provide for opt-in or opt-out customer consent to data collection. On the horizon is an effort to enact legislation that will create a comprehensive federal Internet privacy law.

Existing federal law on government, as opposed to private, rights to access personal information is grounded in the Fourth Amendment, which requires the government to secure a prior judicial warrant issued on probable cause. Internet communications and storage of electronic communications via networking have presented difficult Fourth Amendment questions. The events of September 11, 2001, triggered a frenzy of legislative activity intended to enhance the government's ability to combat terrorism, resulting in the passage of the Patriot Act of 2001. Some of the activity leading to this legislation was controversial, as civil liberties watchdog groups identified adverse implications for protection of individual privacy. The Patriot Act expands the ability of the federal government to conduct surveillance via “pen/ trap orders” of electronic communications to capture potentially substantive “routing, addressing, and signaling” information and erodes privacy protection for electronic communications. In the wake of reports that the hijackers may have communicated with each other by using computers at public libraries, the legislation has serious implications for libraries and higher education institutions that traditionally feel bound to protect the privacy of patrons using library equipment to access the Internet and send and receive e-mail.