Apr 23 2014

POM v. Coca-Cola Case Gets Supremes’ Attention

While the Supreme Court this week declared the good news that racism in America is over, allowing States to ban the use of affirmative action in public universities, it was also hearing arguments in a case that sounds trivial but could have a huge impact on esoteric world of food-labeling. Before POM Wonderful LLC started marketing its line of pomegranate juices, the fruit was largely unheard of in this country. But its rapid success, brought on by the surge in health-related products, has caused POM to have lots of competition in the pomegranate juice market. Over the past few years, POM has brought a series of lawsuits against competitors alleging that their claims that their juices were “pomegranate juices” amount to false advertising and unfair competition because they were blended with other juices.

In 2011, A California federal jury found that Pom hadn’t proven that advertising and labels on Ocean Spray Cranberries Inc.’s pomegranate-cranberry juice drink duped consumers into thinking they bought a “pomegranate juice drink” when they purchased a beverage that actually contained only 2% pomegranate juice. Pom claimed during the trial that Ocean Spray’s drink, which was considerably cheaper misled consumers. The jury disagreed, presumably buying Ocean Spray’s argument that the labeling which showed how much pomegranate juice there was in the container fairly notified consumers of what they were buying.

Coca Cola Pom LabelSo now Pom decided to take on Coca-Cola which produces a drink it calls “Minute Maid Pomegranate-Blueberry Juice” but which actually only contains 0.03% pomegranate juice; 0.02 blueberry juice; 0.01% plum and raspberry juice; and 99.4% apple juice. The label (shown the left) shows a pomegranate and apple of equal dimension and calls itself “a blend of five juices” but the word “apple’ does not appear on the front label. The pomegranate juice in the product is equal to about one teaspoon per half gallon. Pom sued under The Lanham Act (also known as the Trademark Act) which allows private lawsuits against companies that make false or misleading claims. It also allows lawsuits over false claims that would give competitors unfair advantage over other companies. Pom’s essential claim is that pomegranates are very expensive to grow and are known for their positive health benefits. It would be unfair to Pom and misleading to customers to allow Coke, they say, to call its drink Pomegranate-Blueberry Juice when it only contains trace amounts of those products.

Coke, however, argued that it submitted its label to the Food and Drug Administration and that they approved calling it Pomegranate-Blueberry Juice. Their point was that once the FDA approved the label, they were free to use it and it immunized them from suits of this kind. FDA regulations allows a company to label its product by an ingredient that”flavors” the product and does not require the company to label it by its predominant ingredient. Courts below agreed with this argument.
The justices, however, were skeptical.

Justice Anthony M. Kennedy stated: “If Coca-Cola stands behind this label as being fair to consumers then I think you have a very difficult case to make. I think it’s relevant for us to ask whether people are cheated in buying this product.” Kathleen M. Sullivan, a lawyer for Coca-Cola, said consumers were not misled: “We don’t think that consumers are quite as unintelligent as Pom must think they are. They know when something is a flavored blend of five juices and the nonpredominant juices are just a flavor.” Justice Kennedy was not pleased by the response: “Don’t make me feel bad,” he said, “because I thought that this was pomegranate juice.” The courtroom erupted in laughter, and Justice Antonin Scalia chimed in playfully: “He sometimes doesn’t read closely enough.”

The legal question in the case was how to harmonize two federal laws, one allowing private lawsuits over misleading advertising and the other authorizing federal regulation of food labels.But a legal label can still be misleading if it causes confusion to consumers, I would argue. Justice Alito similarly thought the two could be reconciled. A lawyer for the Justice Department (which had submitted a brief in support of Coke’s position that the FDA ruling trumped the Lanham Act) said federal regulations specifically allowed the name Coca-Cola gave its product, immunizing it from Pom’s suit: “By allowing manufacturers to choose to name their juice product based on the juice that flavors the product as opposed to based on the juice that is predominant by volume, consumers will come to understand that when a juice says pomegranate- and blueberry-flavored, what it means is that the juice is present as a flavor.” Judge Alito quickly asked whether that was realistic. “You don’t think there are a lot of people who buy pomegranate juice because they think it has health benefits, and they would be very surprised to find when they bring home this bottle that’s got a big picture of a pomegranate on it, and it says ‘pomegranate’ on it, that it is — what is it — less than one half of 1 percent pomegranate juice?” he asked.

The case could have far-reaching impact on how foods are labeled and is being closely watched by the food and beverage industry, which is concerned that a broad ruling in favor of Pom could open the door to more litigation against food companies and create uncertainty about label requirements. If the Court sides with Coca-Cola, then companies need only assert that they are using an ingredient to “flavor” a product and may label it as being that product no matter how little of it is in the actual item. They just need to do some creative labeling, like Coke did here: In big bold letters, it says “Pomegranate-Blueberry” but below that in smaller and lighter type, it says “flavored blend of 5 juices.” So that the products is technically being called “pomegranate-blueberry flavored” which is why the FDA gave it the green light. If the Court sides with Pom, however, (as I think it might) FDA-approved labeling will not shield companies from these types of lawsuits if the end result is that they are misleading to consumers. As Justice Kennedy stated “I think it’s relevant to ask whether people are cheated in buying this product.”

Apr 21 2014

In Memory of Rubin “Hurricane” Carter

I just wanted to write about the Rubin “Hurricane” Carter I knew and the impact he has had on me and my professional practice over the last decade since we have known each other. So if this blog post goes off the normal topics of this site or perhaps rambles on a little bit, please excuse me as I am writing from my heart not my head.

Contender for the Middleweight crown

Contender for the Middleweight crown

Before Rubin “Hurricane” Carter was exonerated, wrongful conviction was not on the forefront of America consciousness. Sure, we had “I am a Fugitive From a Chain Gang” the 1932 Best Picture winner starring Paul Muni as a man who spent 10 years on a Georgia chain gang for a crime he didn’t commit, but that was really about it. Carter, through his effort to establish his innocence and freedom, captured national attention when his story was documented by Bob Dylan and the move “Hurricane” starring Denzel Washington. Rubin’s story is well-known, so only a brief summary is necessary. Dr. Carter was convicted twice on the same charges of fatally shooting two men and a woman in a Paterson, N.J., tavern in 1966. As the NY times reports in yesterday’s obituary: “But both jury verdicts were overturned on different grounds of prosecutorial misconduct. The legal battles consumed scores of hearings involving recanted testimony, suppressed evidence, allegations of prosecutorial racial bias — Mr. Carter was black and the shooting victims were white — and a failed prosecution appeal to the United States Supreme Court to reinstate the convictions. Carter first became famous as a ferocious, charismatic, crowd-pleasing boxer who was known for his shaved head, goatee, glowering visage and devastating left hook [Seen in the picture to the left]. He s a tough boxer who was known for his shaved head, goatee, glowering visage and devastating left hook. He narrowly lost a fight for the middleweight championship in 1964.”

Rubin and John

Rubin and John

He and his co-defendant John Artis [pictured to the left] were ultimately freed in 1988, 22 years after they were indicted. Rubin refused to be treated as a prisoner and spent nearly 10 years in solitary for his constant refusal to follow prison rules. He was treated brutally and lost an eye while incarcerated.

Following his exoneration, Rubin founded Innocence International based in Toronto Canada, an organization focusing on reversing wrongful convictions in The US and Canada. In around 2004, Dr, Carter (he had been awarded two honorary doctorates) called me to ask me to get involved in the case of David McCallum, a Brooklyn man convicted in 1985 at the age of 16. I had just accomplished my first exoneration of a wrongful conviction involving a man named Angelo Martinez,who spent 18 years in prison for a murder he didn’t commit. Rubin needed an attorney in NY to help McCallum on his case. “Oscar, I am 100% convinced of David’s innocence but he needs your help. Will you help him?” he said in that gravelly, yet pleasant voice that was instantly recognizable. “How can I possibly say No to a legend” I replied. A few months later, Rubin and I were visiting David in Eastern Correctional Facility in Upstate New York. As we were walking in to the prison I asked him if he felt nervous or upset about walking into a correctional center again. He gave me his trademark laugh and said “Walking into a jailhouse knowing for certain that you are going to walk out on your own terms, is not a big deal and bothers me not one bit. It’s when you have no idea when or if you’re ever going to walk out that jailhouses pose a problem.” Good point, I said. After our long visit with David we formulated a strategy and attack plan that we are still pursuing nearly ten years later.

Me, Rubin and Ken Klonsky

Me, Rubin and Ken Klonsky

I would meet Rubin a few times over the years we worked on David’s case together. To the left is a picture of me, Rubin and Ken Klonsky, co-author of Rubin’s latest book and a member of the McCallum innocence team. The picture is from a book-signing event in New York. Rubin saw his role on the team as keeping the team focused on David’s case as well as helping to get media and national experts involved in the case. He would call every now and again with an idea or a pep talk to get the case back on track. Two years or so ago, when I found a key witness and got her to finally give us a statement after she had repeatedly refused to do so, he left me an effusive congratulatory voicemail message, that I carry on my phone to this day. A few times a year, when I am in the midst of a dead-end on a tough case or things don’t go my way in court, I will playback the message. I can never contain the smile that comes to my face when I hear the opening lines “Oscar, how are you my brother. I called to thank you, congratulate you and let you know that I love you . . ..” That’s how the man was – no hate, no regrets, no bitterness. Always wanted to make you feel positive and stay focused on positive things.

The last time I saw Rubin was at an event to raise awareness for Leonard Peltier’s plight. Peltier, a Native American activist and member of the American Indian Movement (AIM) has been protesting his innocence since the day of his arrest. In 1977, he was convicted and sentenced to two consecutive terms of life imprisonment for first degree murder in the shooting of two Federal Bureau of Investigation (FBI) agents during a 1975 conflict on the Pine Ridge Indian Reservation. The evidence against him was thin at best. Rubin was asked to be the keynote speaker at the benefit concert held to raise awareness about Leonard’s case. He was very weak and feeling the effects of the cancer that would take his life. It took all the energy he had to walk out onto the stage and deliver his speech, but no one in the audience was told nor could they discern that he was ill. He was in high spirits during his speech, breaking the ice with a classic one-liner that I had heard him deliver too many times to remember: “Until I saw Denzel Washington portray me on the big screen, I had no idea how good looking I was!” After a few more Denzel-related jokes and anecdotes, he began to talk about John Artis, his co-defendant who refused to turn State’s evidence against Rubin despite promises of freedom. He brought John to the stage to thunderous applause. At this point, the event organizers began getting restless as the scheduled acts were long, and included heavyweights like Jackson Browne; Michael Moore; Common; and Pete Seeger. They were thinking about having someone walk out there to cut him short.

Rubin and BelafonteI decided to tell one of them about Rubin’s illness and that this was likely the last time he would speak at such a public event; I also told him that I had heard his speech and that he was near the finish line anyway. Also, I reminded them, the rest of the folks have no personal connection to wrongful conviction – Rubin is the face of it. They agreed to let him continue. Just then Rubin had worked the crowd up into a frenzy with chants of “Free Leonard.” They were all on their feet chanting with Rubin. One of the organizers said to me “As if I could possibly pull him off now anyway” and we both laughed. He ended the speech to a standing ovation and came backstage. All the famous folk wanted to meet Rubin and he was in his glory. To the left is a picture from that night. That’s Rubin with legend-in-his-own-right Harry Belafonte, one of the emcees of the night. I am partially visible on the right hand edge of the photo. Behind me is legend-in-his-own-right Pete Seeger, another emcee of the night.

That was the last time I saw Rubin in person, though we spoke on the phone a few times afterward. It’s a great way for me to remember him – triumphant; full of joy; clearly the most memorable, appreciated presenter and speaker of the evening; and given his due among other greats as a champion of the underdog and of the unjustly accused.

Rubin signed bookI know I am a better person and lawyer for having known him and worked with him on David’s case. At the book signing for his last book, “Eye of the Hurricane – My Path From Darkness to Freedom” he inscribed my copy of the book, telling me he was proud to know me and work with me, calling me his “friend and hero.” Can you imagine such a thing? Nelson Mandela wrote the forward for Rubin’s book and he’s calling me a hero? It’s just another example of Rubin’s empathy for “the other guy”; I suspect the only time he didn’t show it was during his ring career. The book stands open on the credenza in my office; it’s pretty much the first thing I see when I walk into my office. It’s a reminder to me to constantly stand up for what’s right and to never tire of the fight. It will now also serve as a warm reminder of my friend and hero, Rubin Carter. The world is less fair without him in it. May he rest in peace.

Apr 15 2014

Casino Lawsuit Against Phil Ivey Reveals World of High-Stakes Gambling

Phil Ivey calls himself the Michael Jordan of Poker and is a well-known and much-admired high stakes poker player. But now two lawsuits he is involved in may hurt his reputation and may cause him to be banned from some casinos. Last week, the Borgata Casino Hotel, Atlantic City New Jersey’s most popular and successful betting palace, filed a federal lawsuit seeking to recoup approximately $9.6 Million Ivey won while playing Baccarat during four trips to the Borgata in 2012.

The lawsuit claims that Ivey took advantage of a manufacturing error in sets of cards made by card-maker Gemaco (also named in the suit). It seems the purple version of the Gemaco cards featured a slightly wider left-hand edge than right hand edge; in its contract with the Borgata Gemaco promises that all cards will be perfectly symmetrical. Somehow Ivey picked up on this defect and then used his leverage as a high-stakes player to manipulate the game of Baccarat.

baccaratBaccarat is game preferred by high rollers and casino regulars. It is also highly popular among Asian players and it is not unusual for players to have particular “superstitions” about how the cards are handled and dealt. In certain Asian casinos,for example players are allowed to hold and even tear the cards for good luck since a new deck is used every hand. The game is played with two hands of two cards being dealt: one is called the “banker’s hand” and the other is called the “player’s hand.” Ace through nine are worth their face value (Ace being one) and 10, Jack , Queen and King are all worth zero. The goal is to get as close to 9 as possible. Going over does not “bust” you. Table players bet on whether the banker or player hand will be better; you can also bet that they will tie, though that is the riskiest bet with also the greatest reward. The player hand is dealt first so if you could know the value of the first player card you will have a tremendous advantage. If the player hand is dealt a 7,8 or 9, it is much more likely this hand will have be closer to 9 than the banker hand.

To set up this advantage Ivey sent a set of strict instructions to the Borgata in beginning in the summer of 2012: The cards used had to be purple Gemacos; an automatic dealing machine (called a “shoe”) had to be employed instead of the traditional hand-dealer employed at high-end Baccarat tables; he wanted a private secluded playing pit; since he was to be accompanied by his friend Cheng Sun (also sued) the dealer had to speak fluent Mandarin; he wanted to play $25,00 per hand as a maximum bet; and he wanted to risk up to $1 million. The casino said they would be glad to comply and Ivey wired his $1 Million stake to the casino. Once there, Mr. Sun began to tell the dealer (in Mandarin) that he was superstitious and wanted him to invert the “good cards” (7,8,9) once they were shown. That meant the fat edge wold be on the right in good cards and the skinny edge on the right for all other cards. While this manipulation was going on , Ivey placed minimum bets. Once all the decks in play had been set up per Mr. Sun’s instructions, the lawsuit alleges, Ivey began playing maximum bets. The use of the shoe guaranteed that the orientation of the cards remained the same.

Using this system, according to the casino, Ivey increased his likelihood of winning by about 600%; he would bet on “player” when that hand got a “good” card and on “banker” when it did not. This little bit of extra knowledge allowed him to win $2.4 million in April; $1.6 million in May; $4.8 million in July and $825,000 in October of 2012. In July, he increased the max bet to $50,000 and his stake to $3 Million. Why the relatively low win in October? Beause in that month, he sued Crockford’s Casino in London for allegedly withholding 7.8 Million Pounds Ivey won playing Baccarat until they discovered how he had gamed the casino. Crockford’s sent out a bulletin to all casinos about the lawsuit in which IVEY detailed exactly how he did it; he argued he merely used an error to his advantage and that is not “Cheating” or “Marking the cards.” When the Borgata received the Crockford’s memo, its Executive Vice President walked down to the private Baccarat pit and confronted Ivey. Ivey said that Crockford’s had no right to withhold the money and that the allegations he was cheating were baseless. The casino let him play on -presumably due to his celebrity status. The Borgata alleges that at that point Ivey was up over $3 Million but then suddenly after being confronted he began to lose precipitously – the casino alleges he was losing intentionally.

After examining the videotapes and talking to the dealers involved and after reviewing in detail the Crockford’s lawsuit, the Borgata sued to get its $9.6 million back. But is it cheating? The court will have to determine how it defines tha tterm and how it defines “marking cards.” I say “Yes, it is cheating.” Had Ivey just caught an error and taken advantage of it at the table would be one thing, but to send a specific set of instructions to the casino in order to rig the game in your favor is cheating – and specifically orienting the cards to allow them to be identified is the very definition of “marking.” While it is true that the casino has the tremendous advantage in most cases, by not paying out what the true odds of a winning hand call for, when you sit at the table you agree to those terms. Knowledge of all the rules, odds and game idiosyncrasies is part of the contract between you and the casino.

So I think Mr. Ivey will lose his lawsuit here in the States. Whether these allegations will hurt or enhance his standing in the gambling community remains to be seen.

Apr 11 2014

US Patent Office Denies Trademark Request for “RedSkin Potatoes” As Derogatory and Confusing

Last month, an examining attorney for the United States Patent and Trademark Office (USPTO) has rejected a Washington State potato company’s application to trademark “Washington Redskin Potatoes,” in part because the name could be seen as derogatory to Native Americans. The ruling could mean trouble for the Washington Redskins football team, as the USPTO is currently considering a case challenging the trademark protection granted to the football team’s controversial name.

Funny, you don't look offensive?

Funny, you don’t look offensive?

Importantly, the potato company was not looking to use the name to trademark its particular brand of red-skinned potatoes. The USPTO has previously approved past marks for red-skinned potatoes and even red-skinned peanuts, but because the application was to market “entertainment services” and all sorts of merchandise, from clothing to trading cards, the USPTO found that in that context “red skin” is a derogatory term.

The examiner stated “Registration is refused because the applied-for mark includes matter which may disparage or bring into contempt or disrepute persons, institutions, beliefs, or national symbols. Given that ‘REDSKIN’ in the mark is a derogatory slang term that refers to, and is considered offensive by, American Indians, registration of the applied-for mark must be refused” under the Trademark Act, a 1946 law that prohibits the trademarking of offensive or derogatory terms.

The examiner listed various dictionary definitions for the term and also cited the USPTO’s prior rejection of the football team’s trademark in 1999, a result of a case brought against the name by activist Suzan Shown Harjo. That ruling found the name in violation of the 1946 law, though a federal judge overturned the decision in 2003 due to a legal technicality, allowing the team to keep its trademark protection. The examiner in the potato case also found that it may cause confusion between the potato brand and the football brand.

A new case was brought by activist Amanda Blackhorse to try and remedy the errors that caused the reversal of the first case. In the Harjo case, the court held: “There is no evidence in the record that addresses whether the use of the term “redskin(s)” in the context of a football team and related entertainment services would be viewed by a substantial composite of Native Americans, in the relevant time frame, as disparaging.” Presumably, Ms. Blackhorse has now collected sufficient statistical evidence to establish that most Native Americans find the term “redskin” offensive when use in this context. If she has corrected the reasons the Harjo case was overturned, this potato ruling would establish that the term “red skin” is offensive and derogatory when used outside the context of an actual red-skinned food product

The Blackhorse case was heard by the Trademark Trials and Appeals Board in March 2013. There is no set timetable for a ruling, though it is expected soon. If the Redskins lose, they will certainly appeal as they did when they lost the Harjo case in 1999. Owner Dan Snyder has vowed to keep the name even if he loses the right to own the trademark in it. Of course, without trademark protection, any Tom, Dick and Harry could then make and sell “Washington Redskin” merchandise. I think other NFL owners (who all share in a cut of merchandising from all the teams) would have something to say about Mr. Snyder’s insistence on using a non-trademarkeable name for his team.

Mar 24 2014

Court Rules Publisher Owns E-Book Rights Based on 1967 Contract Language

In 1971, Jean George wrote the popular children’s novel Julie of the Wolves and conveyed publishing rights to HarperCollins to publish the book in exchange for a $2,000 advance and royalty payments of between ten and fifteen percent, depending on number of copies sold.

Her literary agency Curtis Brown, negotiated the terms of the contract for her and insisted with HarperCollins on using certain language Curtis Brown had inserted in other HarperCollins’ contracts going back to 1967.

The popularity of Julie and the Wolves never waned particularly since it is always on the list of 100 most-banned books in America due to its depiction of an attempted rape of its young protagonist. Ms. George, who passed away in May 2012, published two popular sequels, one in 1994 and another in 1997.

Julie of the WolvesE-book publisher Open Road approached Curtis Brown with a proposal to publish an e-book edition of Julie of the Wolves in exchange for a 50 percent royalty to Ms. George. Preferring initially to pursue an e-book publication with her longtime publisher HarperCollins, Ms. George authorized her agent to contact HarperCollins and suggest the e-book publication, with the proviso that HarperCollins match Open Road’s 50 percent royalty offer. HarperCollins expressed interest in electronic publication; however, they counter-offered only a 25 percent royalty. Dissatisfied with that offer and expressing her belief that she — not HarperCollins — owned the e-book rights, Ms. George instead contracted in April 2011 with Open Road to publish Julie of the Wolves as an e-book. The e-book has sold about 1,600 copies to date.

HarperCollins was having none of that and brought suit to force Open Road to disgorge its profits and hand over the e-book. In addition to the standard parts of the publishing agreement, like Paragraph 1 which conveyed to HarperCollins “the exclusive right to publish [Julie of the Wolves] in book form,” the publisher was relying on Paragraph 20 of the contract which granted HarperCollins the exclusive right to “issue licenses, subject to the author’s permission, to use the work in ‘in storage and retrieval and information systems, and/or whether through computer, computer-stored, mechanical or other electronic means now known or hereafter invented.’”

The court found that this language was clear and covered e-books so that it did not need to delve too deeply into cases that talk about “new uses” and whether they were foreseeable or covered by old contracts. It noted that Open Road’s lawyers largely “chose to ignore” this paragraph in their brief. What else could they do? They tried to go on the angle of author’s rights and that the clause was vague and unenforceable because it did not contain a royalty rate. They also tried to rely on prior case law that said the “right to print” did not necessarily include the right to “digitize” the book. But here, the court noted, the language was broader than “print” as it gave HarperCollins the right to “publish.”

What is unusual is that this language was inserted into the contract at the request of Curtis Brown, Ms. George’s agent. HarperCollins did not have this language in its standard contract agreement with any other agency; Curtis Brown drafted the language. This was incredibly forward-thinking in 1967 when computers took up the better part of a large room and even paperbacks were considered second-class to hardcovers. But why would an agent insist on including language that gave the publisher more rights than it wanted? I can bet that this was the easiest contract negotiation HarperCollins ever handled.”You want to give us more rights for the same advance and royalty? OK you twisted our arm.” Well at the time, Curtis Brown was probably only trying to protect Ms. George by including digital media as one of the uses for which HarperCollins had to first obtain Ms. George’s approval. They did not foresee how HarperCollins could use this shield as a sword 46 years later.

Now, if Ms. George’s estate wants to continue the publication of the e-book version of Julie of the Wolves it must agree to HarperCollins’ agreed-upon royalty rate (half what Open Road was willing to give) or shelve the e-book. HarperCollins of course had all the time in the world to try and put out a digital version and before Open Road came along. Ms. George may have well accepted her trusted publisher’s lower rate if HarperCollins had come up with the idea first and approached her. Instead, HarperCollins seems content to just disgorge Open Road’s profits and pursue statutory damages for copyright infringement. I hope the court will not reward Harper with a large award here as they showed no effort in exploiting the book to its fullest.

It’s a cautionary tale about making sure you try and retain as many rights as you can when you sign a publishing deal. The case hopefully will not have too large an impact as most contracts from back-in-the-day will not have a clause foreseeing e-books. But for the George family, the battle is lost. Sometimes even when you think you are protected in the frozen tundra of the publishing world, it can be impossible to keep the wolves at bay.

Read more: http://www.newyorklawjournal.com/id=1202647703185/Harpercollins-Pub.-LLC-v.-Open-Road-Integrated-Media%2C-LLP%2C-11-Civ.-9499#ixzz2wtGs3tUl

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