Creator Economy Legal News + Kayla Moran Law is Live

OUR NEW WEBSITE IS LIVE!

We are excited to announce our new and freshly branded website!

Thank you to Brandika Studio for the branding guide and beautifully designed Kayla Moran Law site. My goal was for it to be an extension of my personal brand and feel unique, fresh, and relatable. I think we nailed it. Thank you for all the love on it this week, too!

Photos are all custom-made by Danny Kandid, my college friend who came to town just for this - the power of networking and staying in touch at work! The studio is Creative Canvas Studios.

Now Legal News

If you’re not on Threads yet, you’re missing out. LinkedIn was my go-to source for the latest legal news and commentary on happenings, but it seems Threads and its informality facilitate a really cool opportunity to see what the people care about. Let’s discuss some key cases/moves that are poised to shake things up.

The FTC has been busy this summer.

There are two major bans by the Federal Trade Commission (FTC) pending right now:

FTC Ban on Bot Followers and Using AI to Exaggerate Marketing.

Here are the key points:

• Ban on Fake Enhancements: Marketers are prohibited from using AI to create fake reviews and from paying for bots to inflate their follower counts.

• Enforcement Challenges: The rule aims to distinguish between fraudulent activity and legitimate scenarios, such as accounts compromised by hackers or multiple accounts linked to a single email. The rule aims to minimize and deter fraudulent activity in marketing practices beyond just disclosing paid partnerships.

• This will be great for social media users, especially creators, and the excessive number of bot accounts spamming our DMs and comments, but I’m worried about how it will impact legitimate accounts and brands who have worked hard to build their accounts because we all know there are bad actors compromising accounts or the practice of having multiple accounts linked to a single email.

• I am happy, though, about it banning marketers from exaggerating their own influence with fake testimonials, reviews, and followers and the use of AI to do so.

• Implementation and Oversight: The rule becomes effective 60 days after publication in the Federal Register. The FTC will handle enforcement directly, shifting away from the previous reliance on the Department of Justice.

Overall, these developments signify a significant step towards more transparent and honest digital marketing and employment practices.

Related Legal Developments

• On June 28, 2024, the Supreme Court reversed Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984), a 40-year-old precedent that let judges defer to federal agencies’ interpretation of statutes when language was unclear.

• This ruling empowers the judiciary to make their own laws and can be quite problematic as the Executive Agencies are supposed to work independently of the Court and are the respective subject matter experts.

• This decision could affect how the FTC's new bans are enforced and interpreted.

• Noncompete Ban: Takes effect on September 4 for most employers, following a legal dispute that challenged the FTC's authority. For more on that, see here.

Concurrent Events

The announcement of the ban on fake followers coincided with the White House's "Creator Economy Conference," emphasizing government engagement with digital influencers and their hopeful goals to address AI, fair pay and mental health and how it impacts this industry.

F1 v Content Creators

Switching gears a bit to sports, if you’ve been following me for a while, you know I’m a big F1 fan, and they’re currently in a bit of a.. shall we say “inchident”? (niche Max v Charles reference if you were wondering)

Recently, Formula 1 has been issuing cease and desist letters to content creators in the F1 community, asking them to change their usernames and eliminate any use of "F1" in their branding.

This protective measure for their trademarks has sparked debate. Many argue that this approach overlooks the valuable contributions these creators make to the sport by attracting younger, female, and new fans.

Critics suggest that Formula 1's actions not only stifle creativity and enthusiasm for the sport but also miss opportunities for potentially beneficial collaborations, such as official partnerships or content-sharing agreements.

Instead of merely enforcing rebrands, Formula 1 could offer more support during the rebranding process and provide educational resources about the importance of protecting intellectual property. Such initiatives could help maintain a supportive relationship with content creators while safeguarding Formula 1's trademarks.

I think they missed the mark on supporting creators who have helped the sport grow and modernize a very male and traditional industry. It also may isolate fans, and that’s upsetting as someone who loves the sport.

I definitely think there was a softer approach to be found, maybe a conference to give a heads up on their efforts to protect their IP so strongly now when they allowed it for so long, how they could foster a better understanding of the issues at hand and more educational resources on how creators can make their own content and support the support without infringing. And even how to protect their own IP.

Clase Azul

The maker of Clase Azul, Casa Tradición, sued the maker of Casa Azul, Casa Azul Spirits, arguing the similarity of the brand names would cause confusion. As a consumer, I would think so, right? Even though I hadn’t heard of Casa Azul. But the courts thought differently…

Background:

• Clase Azul sought a permanent injunction against the trademarked name Casa Azul. US district judge Lee Rosenthal, at the court for the Southern District of Texas, decided that while both parties sold bottled Tequila: the products were different, the packaging was different, the trade names had different meanings, and the products targeted different consumer audiences.

• He cited Clase Azul’s use of additives, including vanilla, artificial sweeteners, caramel coloring, and glycerin.

• Meanwhile, he noted how Casa Azul is a single estate, organic and additive-free Tequila.

“The court finds and concludes that because of the dissimilarities between the two brands at issue, as well as other record evidence, the plaintiff fails to establish a likelihood of confusion and fails to establish trademark infringement, unfair competition, or trademark dilution,” the court document said.

“The application for an injunction is denied.”

My Thoughts: It makes me sad because I love Case Azul, but now we know it is a case of poor enforcement of their brand.

Vibes Case

Before I go, I quickly wanted to update you on the “Vibes” case from the last newsletter and where it it’s at.

The Judge in the District Court for the western district of Texas referred the case to a magistrate judge for them to decide, so we are waiting on that decision on the MTD.

Holding my breath like many creators are, what are your thoughts on any of these stories?

Follow my firm’s Instagram to stay updated with legal news and any changes!

There’s plenty more to come so I hope you stay tuned in on social media - Threads might just be my go to lately.

Thanks for reading!

Talk soon,

Kayla