Online reviews are becoming more important and can directly affect a business’ bottom line. Yelp.com is the most influential review website at this time but their practices in soliciting ads have been criticized. Some businesses have said Yelp made negative reviews more prominent, removed positive ads, and placed negative ads after they declined to advertise with Yelp.
Some of these businesses filed a federal lawsuit, Levitt v. Yelp! Inc., against these practices but the federal district court dismissed the lawsuit for not specifying that Yelp did anything that was illegal. The 9th Circuit Court of Appeals recently confirmed this ruling (the 9th Circuit’s opinion is here).
The federal case contended Yelp extorted money from businesses who declined to advertise on Yelp. The legal definition of extortion is “the obtaining of property from another, with his consent, induced by wrongful use of actual or threatened force, violence, or fear, or under color of official right.” The federal court found Yelp did not commit extortion under this definition because other courts have ruled that threatening economic harm to induce a person to pay for a legitimate service (Yelp ads) is not extortion.
What is most interesting is the federal courts have ruled that manipulating ads for a company that does not advertise with Yelp is not wrongful, at least in relation to extortion laws. The court found a company has no pre-existing or contractual right to have positive reviews listed on Yelp. Therefore, Yelp can remove positive ads and move negative ads to the top and that would not be extortion. It should be noted the federal court found there was insufficient evidence to show that Yelp itself submitted negative reviews about companies that turned down its advertising.
Although Yelp may be off the hook for extortion, Yelp may still be liable under another legal theory. This New Yorker article states Yelp could have problems under consumer protection laws. In the meantime, knowing that Yelp can manipulate reviews does call into question the accuracy of their reviews.
The U.S. Patent and Trademark Office (PTO) has cancelled the Washington Redskins’ federal trademark registration for the terms “WASHINGTON REDSKINS,” “REDSKINS,” “THE REDSKINS,” and”REDSKINETTES” for pro football related-services (click here for the PTO’s decision).
The PTO’s decision was based on a US statute (15 USC section 1052(a)) that prohibits registration of trademarks that may disparage persons or bring them into contempt or disrepute. The PTO ruled the Redskins’ trademark registrations must be cancelled because they were disparaging to a “substantial composite” of Native Americans (“substantial composite” could be but is not necessarily a majority opinion).
The PTO’s determination that Redskins was disparaging was largely based on (1) that dictionaries stated “redskin” was an offensive term starting in the 1960s and by 1986 dictionaries were unanimous in stating it was offensive; (2) the use of “redskin” in common speech, except to refer to the football team, has almost completely stopped; and (3) evidence that a substantial amount of Native American groups and individuals felt the term was disparaging.
The Redskins contended they used the name Redskins with an honorable intent and used it in an honorable manner, but the PTO ruled this was not relevant to its analysis. The PTO also rejected the Redskins’ argument the Redskins brand is so strong that people think of the football team instead of Native Americans since the Redskins use of the name, primarily the logo of a Native American on the helmet, incorporates numerous references to Native Americans.
This ruling will be appealed, and in the meantime the effect is that the Redskins will not be able to use federal trademark law to protect its use of the name Redskins, but still can use state common law (which is less effective, but better than nothing).
For more on this case, see this Vanity Fair article and this Sports Illustrated article.
Lost in the Donald Sterling firestorm is what may have led to all this: the lawsuit by Donald Sterling’s wife, Rochelle Sterling, against V. Stiviano.
The lawsuit, which can be viewed here courtesy of scribd, contends that either (1) Donald Sterling gave community property worth at least $1,800,000 that consists of a Ferrari, two Bentleys, a Range Rover, and a duplex near the Beverly Center to V. Stiviano without the consent of Mrs. Sterling or (2) Stiviano and possibly others fraudulently caused Donald Sterling to convey this property to her. Because of this, Mrs. Sterling seeks the recovery of this property as the wife of Donald Sterling and 1/2 owner of their community property.
Stiviano responded by filing a demurrer (which can be viewed here, also courtesy of scribd), which asks the court to rule that Mrs. Sterling doesn’t have the right to sue Stiviano for the legal theories stated in the lawsuit. Stiviano’s argument essentially is the property she received from Donald Sterling were all gifts and therefore there is no basis to require her to return the gifts or to find that Mrs. Sterling still has an ownership interest in the property.
The court is scheduled to rule on the demurrer on July 8.
For more on the litigants, see this Slate article on Rochelle Sterling and this Fox article on V. Stiviano.
The Regional Director of the National Labor Relations Board (NLRB) in Chicago has ruled that football players at Northwestern University are employees and have the right to form a union (click here for the ruling and for briefs filed by the parties).
The NLRB’s decision is sure to be appealed. The full impact of the ruling is unclear and many questions remain. The ruling was a surprise to most as the term “student-athlete” is well-known and while there is disagreement on whether a scholarship is adequate compensation for NCAA football and basketball players, the idea that college athletes could be considered employees was not considered seriously by the general public until now.
In determining that Northwestern University and its football players were in an employer-employee relationship, some of the things NLRB focused on were the control the university has over the players in their time, activities, and conduct; that the scholarships can be canceled for the failure to follow team rules; that the time commitment for players is about 40-50 hours/week during the season and 12-25 hours/weeks in the off-season; that academics take a back seat to football activities if there is a conflict; and the $70 million in profit earned by the Northwestern football program in the period of 2003-2012.
For more on this case, see this Chicago Tribune article and this ESPN analysis.
Watch out young California party hosts, the California Supreme Court has ruled hosts can be liable for the actions of drunken party guests if (1) there is a cover charge; and (2) alcohol was served to an obviously intoxicated minor party guest who later causes damage to another (click here for the court’s opinion). In this case, the California Supreme Court ruled asking guests to pay a $3 to $5 admission fee to help pay for alcohol constituted a cover charge.
This ruling primarily affects parties for the high school and college crowd, but could apply to any party where there is a cover charge and alcohol is served to an obviously intoxicated minor.
For more on this case, see this San Jose Mercury News article.
An Oakland Raiders cheerleader, Lacy T. (that’s all the name you get per Raiders privacy guidelines) has sued the Raiders claiming that the Raiders have not paid her at least the minimum wage for the work she does as a Raiderette (a copy of the lawsuit is available here).
As a Raiderette, Lacy T. received $125 per home game. There are 10 home games (including pre-season), so Lacy T. received $1,250 per season. Since each game is 3-4 hours, the pay may not seem so bad, but Raiderettes work up to 9 hours per game day and are also expected to attend rehearsals, go to at least 10 public appearances and charity events, appear for a photo-shoot for a swimsuit calendar, and apparently incur expenses for things like eyelashes. For these non-game activities, Lacy T. says she was not paid anything extra.
California law requires that employees are paid a minimum wage (currently $8/hour) for all hours worked. There are some exceptions, but none of those exceptions appear to apply to the Raiderettes.
The LA Times obtained a copy of the Raiderettes handbook, which describe the Raiderettes working conditions in greater detail, including a schedule of fines, advice to keep nail polish in their cars, and how not to fraternize with the players and staff.
For more on this case, see this San Francisco Chronicle article.
Here are highlights of patent troll coverage of the last few months:
Congress continues to work its way through various patent troll bills, although the bill making the most progress, the Innovation Act, does not touch the probable root of the problem: the PTO’s review of patents, especially software patents. Here is one law school professor’s assessment of the Innovation Act. Politico has a summary on the politics involved with the Innovation Act.
This Info World article describes how there are “big trolls” and “small trolls.”
Newegg loses a patent trial in Texas for $2.3 million, although they vow to appeal. Newegg got better results in the ITC (International Trade Commission), where Newegg and other companies defeated a different patent troll.
Finally, IT security specialist Eugene Kaspersky on strategies to deal with patent trolls.