Hunton Retail Law Resource

Citing its potentially outdated 1997 Enforcement Policy Statement on US Origin Claims, the Federal Trade Commission has announced that it will hold a half-day workshop in its DC offices on Made in USA advertising on September 26, 2019. Among other things, the agency is seeking input on how consumers interpret Made in USA claims, what the costs and benefits are of the FTC’s “all or virtually all” standard for unqualified claims, whether its current requirement that 85 percent of costs must be attributable to the United States to make an unqualified claim and whether firms that ...

As reported on the Blockchain Legal Resource Blog on August 27, 2019, The Federal Trade Commission reached a settlement with the promoters of chain-based cryptocurrency schemes—Thomas Dluca, Louis Gatto, Eric Pinkston and Scott Chandler—in which the defendants promised recruits big rewards in exchange for a small payment of bitcoin or Litecoin.

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Design patents can be a useful way to complement an IP portfolio because they can protect the way a product looks instead of how it works. Many consumer products can be defined this way, either in conjunction with, or even in lieu of, utility patents. Where utility patents cover a technical innovation, design patents must claim “ornamental” designs and cannot cover a “primarily functional” design that is essential to the use of the covered product.

On July 1, 2019, the Department of Labor (“DOL”) issued an opinion letter regarding permissible rounding practices under the Service Contract Act (“SCA”).  Although the SCA governs government contractors, the DOL’s guidance is nevertheless helpful to retailers because the SCA incorporates Fair Labor Standards Act (“FLSA”) rounding principles, which are applicable to them.

The Federal Trade Commission has stepped up enforcement of the Consumer Review Fairness Act of 2016 (CRFA) which prohibits companies from barring honest consumer reviews of their products and services. While enforcement of the CRFA was initially slow, that changed this year.

With summer in full swing, several U.S. senators have taken a public step to focus the CPSC’s efforts on dangers at the beach. Airborne umbrellas have become a serious hazard to beachgoers. In fact, CPSC data indicates that there have been over 31,000 beach umbrella-related injuries from 2008 to 2017, including the death of a vacationer after she was struck in the torso and killed by a rogue umbrella in Virginia Beach in 2016. In an unusual move, four senators recently issued a letter urging the CPSC to be more proactive about addressing the dangers posed by beach umbrellas. The senators requested more detailed information about umbrella-related injuries, asked about safety standards to prevent such injuries, and encouraged the creation of a public safety campaign to educate the public about the dangers of beach umbrellas.

Bankruptcy filings of big box retailers such as Sears, Shopko and Charming Charlie have left landlords with difficult space to fill, especially at a time when few retailers are looking to expand and open new brick-and-mortar stores. Charming Charlie will close all of its 261 stores in 2019 (35 of which are located in Texas) while Sears announced 80 new store closures at the beginning of 2019 in addition to the 220 store closures it announced last year. Sears owned 687 stores at the time it filed for Chapter 11 bankruptcy last October. In March, Shopko announced that it would close all of its 370 stores in connection with its bankruptcy filing at the beginning of this year. With other big box retailers including David’s Bridal and Bon-Ton both trying to hold onto their retail stores despite entering Chapter 11 protection, there is uncertainty as to how much empty space landlords will be left to fill. Due to the current state of the retail market, landlords may need to get creative in order to lease important anchor tenant space left empty by these recent bankruptcy filings.

The National Advertising Division (NAD) affirmed that Reckitt Benckiser, Inc.’s claim of “#1 Carpet Cleaning Brand” for its Resolve Carpet Cleaner product line is supported by the appropriate underlying unit sales data. Responding to a challenge brought by BISSELL Homecare, Inc., NAD noted that Reckitt Benckiser’s “#1 Brand” claim is properly understood to mean that the brand itself, rather than any specific product, holds the highest market share in its relevant category. To that, Nielsen tracking data for units of products sold to consumers in the “carpet cleaning brand” category supports Reckitt Benckiser’s “#1 Brand” sales superiority claim for the Resolve products. Still, NAD noted that Reckitt Benckiser fails to properly identify the time period and scope for the relevant data in its disclaimer. Reckitt Benckiser has agreed to comply with NAD’s recommendation of a modified disclaimer in the future use of its “#1 Brand” claim.

The balance of power at the CPSC will shift after Acting Chairman Ann Marie Buerkle’s surprising announcement that she will leave the CPSC this fall. Buerkle has served as a CPSC Commissioner for six years and the Acting Chairman of the agency for almost half that time. President Trump has nominated Buerkle to be the permanent Chairman three times (2017, 2018, and 2019), but each time the Senate failed to vote on her nomination. Buerkle announced she is withdrawing her 2019 nomination to become the permanent Chairman and to serve an additional seven-year term. She will continue as Acting Chairman until September 30 and will complete the remainder of her term as Commissioner until October 27. She says that afterward, she will “pursue new opportunities that will allow me to continue my life’s work of advocacy and public service as well as spend more time with my six children and eighteen grandchildren.”

Many retailers use bonus programs to incentivize employee performance. With respect to bonuses paid to non-exempt employees (i.e., those employees who are entitled to overtime under the Fair Labor Standards Act), the retailer must then determine whether it owes additional overtime on the incentive bonus.