Archives: March 2017

Guidance From Commercial Co-Venture Caselaw: A Unicorn of a Topic

There are not many court decisions concerning commercial co-ventures.  In fact, there are perhaps five.  This is far less than the number of decisions involving unicorns (seriously).  Nevertheless, these few court decisions provide some guidance on how a court may look at claims involving alleged violation of commercial co-venture laws.  Let’s take a look:

Attorney General v. Bach, 81 Mass. App. Ct. 1126 (2012):  Company sold tickets to a “show house” with proceeds to go to charity.  No contract with charity.  No registration (note: MA).  Show not a big hit.  Company went under.  Unknown if donation actually made.  Two years later, MA attorney general brought action against the owner personally.   Court found owner violated CCV laws.  Permanent injunction issued precluding owner from failing to comply with the act. (more…)

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Hey That’s Me Drinking That Beer! UGC Rights at Issue in Beer/Photo Lawsuit

Kayla Kraft (no known relation to the cheese people) found herself on a Natural Light coaster with a fake handlebar mustache drinking a beer under the heading “Every Natty Has a Story.”  She apparently didn’t like that story and just sued Anheuser-Busch, the makers of Natural Light beer, for copyright infringement and invasion of privacy.

According to the complaint, in 2013 Kraft’s friend Kathyrn Belasco snapped the mustachioed photo of her using Kraft’s phone.  Kraft then posted the photo on Facebook.  Three years later, Belasco assigned all of her rights to the photo to Kraft.

News reports say that the photo was submitted to Natural Light’s Facebook page as part of the “Natty Rewards” contest run in 2014 by Anheuser-Busch where contestants were asked to submit a photo of themselves “acting natural.”  (Unknown whether drinking beer with a fake mustache was Ms. Kraft’s natural state.)  Rules are here. The Rules provide that photos submitted are the original work of the entrant and do not infringe upon anyone’s copyright or publicity rights.  The Rules also grant Anheuser-Busch a license to use the photo in any and all media for any purpose.  Basically, the Rules say everything that’s typical for a UGC contest.

The Complaint doesn’t mention the contest, but does allege that the photo has been used as part of Natural Light’s “Every Natty Has a Story” campaign without Kraft’s or Belasco’s consent.  Anheuser-Busch has not yet answered the Complaint.

Assuming the photo was submitted as part of the contest, this lawsuit raises a number of interesting issues.

(more…)

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Let’s Review Some Tricky Commercial Co-Venture Issues

From a quick Google search I see articles citing “at least 22” states have commercial co-venture laws; “over 30 states have laws governing commercial co-ventures”; “currently 27 states define ‘commercial co-venturer’ in their solicitation laws”; “about 20 states” have commercial co-venture laws.  You get the point.  This can be a tricky area of the law.  For the record, 23 states have specific statutes pertaining to commercial co-ventures/venturers and additionally, the Illinois “charitable trust” statutes would apply to commercial co-venturers.

Many of these commercial co-venture statutes are uniform in their definitions and applicability.  However, there are always grey areas where the practical doesn’t always fit with the statutory.  I’d like to review a few of these areas with questions frequently posed:

If we only ask consumers to “like” our Facebook page to trigger a donation to charity is that a commercial co-venture?

Perhaps in some states.  The vast majority of state statutes expressly require a purchase to trigger a donation.  But a few states (AL, MA and MS) have statutes drafted which could encompass non-purchase solicitations.  By their terms, these states’ laws would apply whenever a company “conducts, promotes, underwrites, or sponsors a sale, performance or event of any kind which is advertised and which will benefit to any extent a charity.”  See AL Code § 13A-9-70(A); Mass. L. ch. 68, § 18; Miss. Admin. Code 1-15-1.01. (more…)

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One Whale of a Story $2MM Fishing Contest Prize in Dispute After Failed Polygraph Test

Fishermen(persons?) say that the strongest currents yield the biggest catch.  Or at least I think they say that; I really don’t fish.  But there’s a storm a brewing in Maryland federal court over a disputed $2.8 million first prize in the “world’s largest billfish tournament,” known as the White Marlin Open in Ocean City, Maryland. White Marlin Open, Inc. v. Heasley, No. 1:16-cv-03015 (D. Md.)

Entering anglers had to pay a $1,000 fee to register their boat and winners received a prize based upon the type/size of fish caught and the total entry fees.   Phillip G. Heasley allegedly caught the only qualifying white marlin which would purportedly qualify him for a $2.8 million prize.  Pursuant to the contest rules, the Sponsor could require him to take a polygraph test.  He did.  He was found to have used “countermeasures” to manipulate the examination process.  Ooh, the plot thickens. The boat’s captain and crew were also given polygraph tests which purportedly helped sink Heasley.  Apparently, the claim is that Heasley’s catch report had a catch time of 8:15 a.m. that was written over with a time of 9:05 a.m..  The Official Rules state that anglers cannot fish until after 8:30 a.m.  Waiting to snare the big prize were the other winners.

The Sponsor, after conferring with the three independent judges, determined Heasely was disqualified.  The Sponsor then filed an Interpleader action in Maryland state court (which was later removed to federal court) seeking to deposit the prize money in escrow and let Heasely and the other winners fight it out.  But the Sponsor didn’t stop there.  The Official Rules provided that the Sponsor “shall be entitled to reimbursement for 5 times its costs and fees, including attorneys’ fees, which result from the determination and resolution of the validity of unjustified protests.”  The Sponsor then sought 5x its attorneys’ fees in the lawsuit. (more…)

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