White nationalist Steve King was found liable for copyright infringement for his use of the “Success Kid” meme template in his advertising.
King’s fair use argument failed.
Let’s look at why.
Griner registered the photo with the Copyright Office in 2012 and then licensed the image to businesses like Microsoft, Coca-Cola, and others:
Without permission, King used a version of the meme soliciting donations for his campaign.
Griner sued King and the King for Congress Committee for infringement, the case went to a jury trial, and the Committee was found liable for infringement.
The Committee appealed, arguing that it made fair use of the Success Kid template, and lost.
Here’s how the 8th Circuit looked at the fair use argument:
Recall the four statutory fair use factors, which the court applied (paraphrasing here):
1) The purpose and character of the use, including whether the use is commercial;
2) The nature of the copyrighted work;
3) The amount copied;
4) The use’s effect on the market/value of the work.
For the first factor, the court determined “it is undisputed that the Committee’s use was purely commercial …. The Committee sought to exploit the copyrighted material, for financial gain, without paying the customary price.”
The Committee argued that disseminating a meme on social media is something that happens millions of times a day.
Not a good argument:
The Committee conceded that it had no argument as to the second factor (nature of the work), so the court skipped it.
The third factor cut against the Committee:
The fourth factor (impact on the market for the original work) favored neither party.
While Griner licensed the template to many big brands, “a reasonable jury could conclude that association with King would drive away some potential licensees.”
The takeaway: Using memes for noncommercial purposes is probably fair use in most circumstances.
But using memes in ads probably is not.
Brands using memes in ads should think carefully about the risks.
Read the opinion: https://media.ca8.uscourts.gov/opndir/24/06/223623P.pdf
The FTC is not wasting any time this year—here’s a new case about subscription offers. The agency sued personal finance app FloatMe and its co-founders today. FloatMe allegedly charged users without consent and used “dark patterns designed to thwart … attempts to cancel.”
The FTC says FloatMe’s cofounders knew FloatMe was “double or triple” charging consumers the subscription fees, due to “pushing out to members without fixing shit,” but let the issue linger for years.
And this part is important for any consumer-facing brand offering subscriptions—the FTC scrutinized FloatMe’s cancellation procedures. Remember, the Restore Online Shoppers’ Confidence Act (ROSCA) requires that consumers must be provided a “simple” mechanism to cancel. The FTC has emphasized that “simple” should mean that it’s as easy to cancel an online subscription as it is to enroll in it.
Back to FloatMe: The FTC says FloatMe’s cofounder admitted that they intentionally designed the cancellation process to be difficult:
FloatMe allegedly racked up customer complaints about its “faulty” cancellation procedures, including non-functional “cancel” buttons and other sources of “friction.”
And when customers did manage to request cancellations, “FloatMe often fails to honor the cancellation requests,” according to the Complaint.
Recall also that ROSCA requires clear and conspicuous disclosure of ALL material terms of a transaction that includes a negative option (i.e., subscription) offer. Here, like in the FTC’s case against MoviePass, the agency alleges that FloatMe violated ROSCA by failing to disclose material terms of the offer—including material terms that were not related to the subscription component:
And here are the other counts related to ROSCA:
The FTC isn’t the only one suing about noncompliant subscription practices. This continues to be a hot area for consumer class action litigation, too. Start the year off right by taking a close look at your auto-renewal offers to see if you’re taking on risks you don’t want.
Sway Fitness—a supplement brand “based on the Sway House”—is suing Blake Gray, Noah Beck, Bryce Hall, Griffin Johnson, and Josh Richards. Sway Fitness says the Sway House stars breached contracts by failing to create content supporting the brand and by promoting competitors.
Sway Fitness says the creators caused more than $500,000 in damages, including $390,000 of product that GNC ordered but could not sell.
