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Tiffany’s Trademark Infringement Victory a Costly Lesson for Costco

September 19, 2017

Authors

Bryan Cave, Merrit Jones, Alex Whitworth and Nancy Franco

Tiffany’s Trademark Infringement Victory a Costly Lesson for Costco

September 19, 2017

by: Bryan Cave, Merrit Jones, Alex Whitworth and Nancy Franco

A federal district court has ordered Costco to pay Tiffany at least $19.4 million in a trademark infringement battle based on generic diamond engagement rings bearing the “Tiffany” name.

Judge Laura Taylor Swain in the Southern District of New York ruled that Tiffany is entitled to $11.1 million as profits for trademark infringement, plus interest, representing triple its lost profits, plus $8.25 million in punitive damages awarded by a jury last October. Judge Swain also permanently barred Costco from using “Tiffany” as a stand-alone term, without modifiers such as “setting,” “set” or “style.”  Tiffany did not assert any infringement claims based on Costco’s use of the terms “Tiffany style” and “Tiffany setting,” leaving open the question of whether these modifiers could provide a fair use defense.  Costco has appealed the ruling.

In an unsuccessful bid to dismiss the case before trial, Costco had argued that “Tiffany” has become a generic

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Retail Distributors Face Compliance With Sugary Drink Taxes Around the Country

September 15, 2017

Authors

Bryan Cave and Charles Lin

Retail Distributors Face Compliance With Sugary Drink Taxes Around the Country

September 15, 2017

by: Bryan Cave and Charles Lin

Retail distributors of sugary drinks are facing compliance with a number of taxes enacted by cities around the country.  San Francisco’s sweetened beverage tax takes effect on January 1, 2018, and follows a national trend.

Similar taxes have recently taken effect in numerous other localities, including:

  • Berkeley in December 2015;
  • Albany, California in December 2016;
  • Philadelphia in January 2017;
  • and Oakland, California; Boulder, Colorado; and Cook County, Illinois in July 2017.

This past June, voters in Seattle, Washington approved a sugary drink tax, while such a tax was rejected by voters in Santa Fe, Mexico.

Typically, the taxes take the form of an excise tax on the first distribution of sugar-sweetened beverages and the powders or syrups used in making these beverages. The term “sugar-sweetened beverage” can be defined differently in each locality.  In Albany and Berkeley, for example, a sweetened beverage is defined broadly as any beverage

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Retailers Should Be Aware of Data Privacy Concerns With Bring Your Own Device Policies

September 1, 2017

Authors

Bryan Cave, David Zetoony and John Bush

Retailers Should Be Aware of Data Privacy Concerns With Bring Your Own Device Policies

September 1, 2017

by: Bryan Cave, David Zetoony and John Bush

Many retailers permit their employees to use personal mobile devices, such as smartphones and tablets, to access company-specific information, such as email, under a Bring Your Own Device (“BYOD”) policy. BYOD policies can be popular for employees that want to use hand-picked devices and for retailers that want to avoid the cost of providing, and maintaining, company-owned devices. Nonetheless, the use of company data on non-company devices implicates both security and privacy considerations.

A reported 40 percent of companies offer BYOD to all employees, according to a survey by Crowd Research Partners.  Security concerns, data leakage, and malware were all listed as top concerns of retailers in allowing BYOD.

Consider the following when deciding upon a BYOD policy:

Is the scope of your control over employees’ mobile devices consistent with your company’s interest?  Retailers should consider why they have an interest in knowing about their employees’ mobile devices; that

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Oregon Passes Predictable Scheduling Law; How to Ensure Your Business Complies

August 24, 2017

Authors

Bryan Cave and Traci Choi

Oregon Passes Predictable Scheduling Law; How to Ensure Your Business Complies

August 24, 2017

by: Bryan Cave and Traci Choi

Oregon has become the first state to enact a predictable scheduling law, S.B. 828, which regulates employer scheduling practices in the food service, hospitality, and retail industries. As we previously reported, cities such as New York, Seattle, and San Francisco have passed similar measures. Oregon is likely the first of many states to pass such legislation.  The new law will take effect on July 1, 2018.

The law applies to retail establishments that operate in Oregon and employ at least 500 employees worldwide. Separate entities may be considered an “integrated enterprise” for purposes of determining whether an employer employs at least 500 employees.  The legislation tasks the Commissioner of the Bureau of Labor and Industries to adopt rules to assist employers to determine whether separate entities are an integrated enterprise.

The law applies to non-exempt employees of covered employers, and does not apply to salaried, exempt employees, workers

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Get Ready for New Data Transfer Security Standard for POS Systems

August 14, 2017

Authors

Bryan Cave and Stanton Koppel

Get Ready for New Data Transfer Security Standard for POS Systems

August 14, 2017

by: Bryan Cave and Stanton Koppel

Retailers are still feeling the pain from implementing EMV-compliant POS systems. An article by Kate Fitzgerald in the PaymentsSource Technology newsletter (August 8, 2017)  caught our eye. The gist of it is that the PCI-DSS standard for data transmission will change in June of next year. Card network rules require Acquirers to require their merchants to comply with the PCI-DSS standard and the companion PA-DSS standard, so this change will leave them out of compliance if they have not implemented a newer version of the data transmission security standard.

There is not a liability shift in the rules specifically related to the new standard, but merchants will be subject to fines and the deficiency will become apparent when they undergo their periodic security audit after the June 30 date. However, the old standard is being dropped by the Payment Card Industry Security Standards Council because it leaves the POS systems

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Bans on Credit Card Surcharges Face First Amendment Challenges

August 7, 2017

Authors

Bryan Cave, Vanessa Fulton, Stanton Koppel and Seyi Iwarere

Bans on Credit Card Surcharges Face First Amendment Challenges

August 7, 2017

by: Bryan Cave, Vanessa Fulton, Stanton Koppel and Seyi Iwarere

State laws that prohibit retailers from charging customers a surcharge for using a credit card are being challenged on First Amendment grounds.

For more than four decades, California’s Song-Beverly Credit Card Act of 1971 prohibited retailers from charging credit card customers such a surcharge. In Italian Colors Restaurant, et al. v. Harris, 99 F.Supp.3d 1199 (E.D. Cal. 2015), a federal judge ruled that the law unconstitutionally limits retailers’ freedom of speech. The California attorney general appealed, and the case is set for oral argument before the Ninth Circuit Court of Appeals on August 17.

The outcome may be influenced by the U.S. Supreme Court’s decision in March of this year in Expressions Hair Design v. Schneiderman, 137 S. Ct. 1144 (2017), that a similar New York ban on credit card surcharges implicates the First Amendment. That case has been remanded to the Second Circuit to determine whether the ban

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DOJ Puts Website Accessibility Regulations on Inactive List

DOJ Puts Website Accessibility Regulations on Inactive List

July 25, 2017

by: Bryan Cave, Merrit Jones, Heather Goldman, Rodney Page, Steven Stimell, Jennifer Dempsey and William Wortel

Retailers and other businesses that have been waiting for the Department of Justice (“DOJ”) to promulgate regulations concerning website accessibility under Title III of the Americans with Disabilities Act (the “ADA”) will now have to wait a lot longer. Eight years after the DOJ began the rulemaking process on this issue, it has now listed the rulemaking as “inactive.”

Federal agencies typically provide public notice of the regulations that are under development twice a year in the Unified Regulatory Agenda. The first Agenda was issued by the Trump Administration on July 20, 2017, and contains noteworthy changes from the last Agenda issued by the Obama Administration.

For the first time, the Agenda breaks down all agency regulatory actions into three categories: active, long-term, or inactive. While the Agenda does not define these terms, only the active and long-term matters receive a description and projected deadlines. The inactive matters appear in a

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Ninth Circuit Reconsiders, Nixes Deceptive Labeling Claim Against Gerber

July 21, 2017

Authors

Bryan Cave, Merrit Jones and Vanessa Fulton

Ninth Circuit Reconsiders, Nixes Deceptive Labeling Claim Against Gerber

July 21, 2017

by: Bryan Cave, Merrit Jones and Vanessa Fulton

Baby food maker Gerber has scored a partial victory in a false labeling would be class action. The Ninth Circuit in Bruton v. Gerber Prods. Co., Case No. 15-15174, has reversed itself and thrown out a deceptive labeling claim based on the plaintiff’s lack of evidence that reasonable consumers would be deceived.

Plaintiff Natalia Bruton filed the putative class action against Gerber Product Co. alleging that labels on certain baby food products included claims about nutrient and sugar content that were impermissible under Food and Drug Administration (FDA) regulations that prohibit such claims on products intended for children less than 2 years old. Bruton did not allege that the labels were false, but that the lack of such claims on competitors’ products (in compliance with FDA regulations) made Gerber’s labels likely to mislead the public into believing that Gerber’s products were healthier.

As we reported in a previous

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Website Accessibility Update: California Federal Court Denies Hobby Lobby’s Motion to Dismiss

Website Accessibility Update: California Federal Court Denies Hobby Lobby’s Motion to Dismiss

July 3, 2017

by: Bryan Cave, Merrit Jones, Heather Goldman, Rodney Page, Steven Stimell, Jennifer Dempsey and William Wortel

Another website accessibility decision against a retailer, this time involving Hobby Lobby Stores, Inc. in the Central District of California, highlights the uncertainty of the law and of litigating such cases while courts continue to reach different conclusions.

In Gorecki v. Hobby Lobby Stores, Inc., Case No. 2:17-cv-01131-JFW-SK (C.D. Cal. June 15, 2017), the district court denied Hobby Lobby’s motion to dismiss and held that the retailer’s website constitutes a “public accommodation” under Title III of the Americans With Disabilities Act (“ADA”).  In so holding, the court noted that the website allows consumers to purchase products, search for store locations, view special pricing offers, obtain coupons, and purchase gift cards.

The court also relied on Department of Justice (“DOJ”) regulations requiring public accommodations to use auxiliary aids and services to “communicate effectively” with disabled customers.

This decision was issued only two days after a federal judge in the Southern

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New York City Follows Trend in Passing Predictive Scheduling Law for Retail

June 27, 2017

Authors

Bryan Cave and Traci Choi

New York City Follows Trend in Passing Predictive Scheduling Law for Retail

June 27, 2017

by: Bryan Cave and Traci Choi

New York City has enacted a law banning “on-call scheduling” for retail employees. The law takes effect on November 26, 2017.

With “on-call scheduling,” an employer requires an employee to be available to work, to contact the employer, or to wait to be contacted by the employer to determine whether the employee must report to work.

New York City’s new law, Local Law § 20-1251 (Int. No. 1387-A), prohibits retail employers from cancelling, changing, or adding work shifts within 72 hours of the start of the shift. Retail employees may, however, request time off and switch shifts with their co-workers.  Employers can revise employees’ work schedules with less than 72 hours’ notice under limited circumstances.

Retail employers must also: (1) post employees’ schedule 72 hours before the beginning of the scheduled hours of work; (2) provide upon request a written copy of employee’s schedule for any week worked within

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Retailer Loses ADA Website Accessibility Trial

Retailer Loses ADA Website Accessibility Trial

June 20, 2017

by: Bryan Cave, Heather Goldman, Merrit Jones, Rodney Page, Steven Stimell, William Wortel and Jennifer Dempsey

Retailers with both physical locations and a website should take note that a United States District Court has held that Winn-Dixie violated Title III of the Americans with Disabilities Act (“ADA”) because its website was inaccessible to the visually impaired plaintiff.

The Court’s decision in Gil v. Winn-Dixie Stores, Inc., No. 16-cv-23020, Dkt. No. 63 (S.D. Fla. June 13, 2017) is significant for a number of reasons.  First, Gil appears to be the first website accessibility lawsuit to go to trial.

Second, despite the fact that Winn-Dixie does not conduct sales through its website, the Court found that the website was “heavily integrated” with the physical store locations because customers can use the website to access digital coupons, find store locations, and refill prescriptions through the website.

Third, the Court considered the cost of making Winn-Dixie’s website accessible in light of the total cost to launch and upgrade a website. While the

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FDA Delays Implementing Nutrition and Supplement Facts Label Rules

June 16, 2017

Authors

Bryan Cave, Brandon Neuschafer, Merili Seale and Merrit Jones

FDA Delays Implementing Nutrition and Supplement Facts Label Rules

June 16, 2017

by: Bryan Cave, Brandon Neuschafer, Merili Seale and Merrit Jones

The FDA has announced that it is delaying implementation of the Nutrition Facts and Supplement Facts Label and Serving Size final rules.  As we previously reported, the rules were finalized in May 2016 and initially set a general compliance date of July 26, 2018, although manufacturers with annual food sales of less than $10 million were given an additional year to comply.

The FDA did not elaborate on the new timeframe for implementation, but stated in a revised online guidance that it will provide details of the extension through a Federal Register Notice at a later time.

The rules require a revamped Nutrition Facts format that would increase the type size of certain nutrition information, require mandatory declarations for “added sugars,” Vitamin D and potassium, impose a new definition of “dietary fiber,” and revise serving sizes for certain food products.

The FDA explained that the extension was in response to

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Unicorn-Themed Drinks Spawn Trademark Dispute Between Coffee Retailers

June 9, 2017

Authors

Bryan Cave, Erick Schroeder, Steven Alagna and Nick Williamson

Unicorn-Themed Drinks Spawn Trademark Dispute Between Coffee Retailers

June 9, 2017

by: Bryan Cave, Erick Schroeder, Steven Alagna and Nick Williamson

While the mythical unicorn is a rare creature, it has recently become a marketing phenomenon, with the unicorn’s rainbow-laden powers being harnessed to sell unicorn-themed products that can cover you from literally head to toe, i.e., from makeup (such as “Unicorn Snot®”, a glitter gel) to slippers and even a toilet spray made with “unicorn farts” (Squatty Potty’s “Unicorn Gold®”). Perhaps inevitably, brand owners have begun to battle over who can lay claim to a unicorn trademark. And this includes drinks that sound like coffee (but largely are not).

In April, caffeine aficionados found it was nearly impossible to avoid Starbucks’ limited-time promotion of its Unicorn Frappuccino. Purple and turquoise, and made of créme frappuccino syrup, milk, ice, mango syrup and “whipped cream-sprinkled pink and blue fairy powders,” the reportedly coffee-less drink was heavily promoted. One Brooklyn-based coffee and juice bar, however, was not enchanted by Starbucks’ frappe.

The End

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Retailers and Other Food Importers Must Ensure Food They Import Meets U.S. Safety Standards

May 30, 2017

Authors

Bryan Cave, Merrit Jones and Brandon Neuschafer

Retailers and Other Food Importers Must Ensure Food They Import Meets U.S. Safety Standards

May 30, 2017

by: Bryan Cave, Merrit Jones and Brandon Neuschafer

Requirements take effect today under the FDA’s new Foreign Supplier Verification Program (FSVP), which makes retailers and other businesses that import food into the United States responsible for verifying that the food has been produced in a manner that meets applicable U.S. safety standards.

FSVP is one of the seven foundational rules of the FDA’s Food Safety Modernization Act (FSMA), the most sweeping reform of our food safety laws in more than 70 years. It aims to ensure the U.S. food supply is safe by shifting the focus from responding to contamination to preventing it.

A central tenet of the FSVP is that the same preventive food safety standards should apply to all food consumed in the U.S., regardless of where the food is produced. The FSVP therefore requires that importers have a program in place to verify that their foreign suppliers are producing food in a manner that satisfies

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Arizona Employers Prepare to Implement New Paid Sick Time Law

May 22, 2017

Authors

Bryan Cave, Jay Zweig and Melissa Costello

Arizona Employers Prepare to Implement New Paid Sick Time Law

May 22, 2017

by: Bryan Cave, Jay Zweig and Melissa Costello

After surviving a legal challenge rejected by the Arizona Supreme Court, Arizona’s $10 minimum wage enacted under Proposition 206 is already in effect, and the sick leave portion of the law takes effect in July. For many companies, this will require new paid time off and sick leave policies, or at least revisions to their existing policies.

With enactment of Proposition 206, Arizona joins other states with sick leave laws, including Illinois, California, Oregon, Washington, Massachusetts, Vermont, and Washington, D.C. As previously reported by the Retail Law blog, the Illinois law took effect in January 2017.

The Arizona law generally applies to all Arizona employees; it makes no distinction between salaried, hourly, full-time, part-time, temporary or seasonal employees. All employees must accrue one hour of paid sick time for every 30 hours worked.

Paid sick leave can be used for medical care of a mental or physical illness, injury

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Avoid Potential Liability for Violating Laws Related to Email Marketing

May 19, 2017

Authors

Bryan Cave, Christopher Achatz and John Bush

Avoid Potential Liability for Violating Laws Related to Email Marketing

May 19, 2017

by: Bryan Cave, Christopher Achatz and John Bush

Email is an important marketing tool for retailers, who should be aware of federal and state laws regulating its commercial use. Since its enactment in 2003, the Controlling the Assault of Non-Solicited Pornography and Marketing (“CAN-SPAM”) Act has attempted to curb the number of unwanted emails and impose some rules on a largely unregulated frontier. When followed, CAN-SPAM Act’s restrictions give email recipients some control over their inboxes and also maintain fairness in how emails present themselves. Failure to follow the CAN-SPAM Act can lead to penalties of up to

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