Wednesday, April 16, 2008

Interview: John Villafranco of Kelley Drye & Warren

I am pleased to present the next interview in my occasional series on advertising lawyers. Today's subject is John Villafranco.

Here's his introduction: I am a partner at Kelley Drye & Warren and provide litigation and counseling services to corporations involved in advertising and marketing. My practice focuses on Lanham Act litigation, consumer class action defense, representation of clients in advertising substantiation proceedings and investigations conducted by the Federal Trade Commission and state attorneys general, and representation of challengers and advertisers before the National Advertising Division. I am co-Editor-in-Chief of the ABA's Consumer Protection Law Developments treatise, which will be published in the Fall of 2008, and I am immediate past Chair of the ABA Section on Antitrust Law Consumer Protection Committee.

Q: How did you get into advertising litigation?

I started in 1991 as a first year associate in the antitrust section at Collier Shannon Rill & Scott which, at the time, was perhaps the most prolific antitrust practice in the United States. I liked but did not love antitrust law, and I made myself available to work on advertising cases that were being handled by Judith Oldham (a gifted attorney and my eventual mother-in-law). When Bill MacLeod joined the firm after leaving his position as Director of the FTC’s Bureau of Consumer Protection, our advertising case load increased. I never worked on another antitrust case – it has been advertising all the time – and it has been a lot of fun.

Q: Tell us about some favorite advertising cases.

There have been many, but my favorite may be the Joe Camel case, which we litigated against the FTC in 1998 before Administrative Law Judge James Timony. The case was hotly contested with 17 FTC lawyers filing notices of appearance. Complaint Counsel relied on its unfairness authority under Section 5 of the FTC Act, alleging that the cartoon camel was a “substantial contributing factor” to smoking initiation among teens. I was a senior associate and it was my first meaningful opportunity to devise case strategy, present oral argument, and otherwise manage a case. And this one had a little bit of everything – pre-trial publicity, surprising documents (for both sides), and novel theories. After a few weeks of trial and immediately after we finished the successful cross examination of the FTC’s causation experts (they never could, in my mind, establish that the cartoon camel caused substantial injury), Complaint Counsel surprised everyone by telling the judge that they were withdrawing the complaint. They asserted that the issue was moot as a result of the multi-state settlement agreement that had just been negotiated between the states and the tobacco companies. There was some truth to that, but we did not see it that way. They brought the complaint, litigated it, then withdrew it right when the case was breaking our way. No FTC order, no injunctive relief. We celebrated as if it was a clean win.

And then came the fast food wars. In 2001, Truett Cathy, the founder of Chick-fil-A sought a preliminary injunction in Chick-fil-A, Inc. v. Burger King Corp., attempting to prevent Burger King from describing its first chicken sandwich as “the original chicken sandwich.” The claim was self-comparative, in that Burger King had just launched its BK broiler chicken sandwich and needed to call the existing chicken sandwich something. Mr. Cathy did not see it that way. He asserted that he was the true inventor of the chicken sandwich -- the very first human being to put chicken between two slices of bread -- and therefore Burger King could not claim that they had “the original.” A Library of Congress search yielded recipe books from the 1800s that included chicken sandwiches and the motion was denied.

Three years later, in Steak ‘n Shake Co. v. Burger King Corp., Burger King found itself defending motions for a TRO and preliminary injunction seeking to enjoin Burger King's launch of its new “steak burger” sandwiches. Steak ‘n Shake alleged violations of federal and state trademark and anti-dilution statutes. They claimed (you guessed it) that they invented the steak burger and that consumers associated “steak burger” with Steak ‘n Shake. Same result – motion denied.

Another favorite was BellSouth Telecommunications, Inc. v. Hawk Communications, LLC, a 2004 Lanham Act case that we brought in the Northern District of Georgia. In that case, BellSouth – the largest ISP in the region – sought a preliminary injunction to stop Hawk from advertising that its narrowband internet service allowed consumers to “Dial Up at DSL Speed.” Hawk advertised heavily all over the southeastern United States, including on billboards right outside the BellSouth headquarters, and it was driving BellSouth crazy. We had previously prevailed on all issues before the National Advertising Division, but Hawk chose to ignore the NAD decision. In granting our motion for preliminary injunction, Judge Shoob credited the NAD decision (a precursor to Judge Carter’s decision in the November 2007 case Russian Standard Vodka (USA), Inc. v. Allied Domecq Spirits & Wine USA, Inc., which I recently heard described as a “love letter to the NAD”), and extended the doctrine of necessary implication into the Eleventh Circuit.

Q: What are the emerging trends in advertising law?

When I started in 1991, advertising was neatly categorized under the headings of print, television, and radio. Today, it is all over the place: viral and buzz marketing, product placement, mobile marketing, consumer-generated content, and who knows what’s next. This is one aspect of the practice that I love – it’s on the move.

Q: Over the past several years, an increasing number of courts have both expressly recognized that prudential standing limitations apply to false advertising actions under the Lanham Act and have applied those limitations to bar certain plaintiffs from pursuing claims. Last year, the Eleventh Circuit’s decision in Phoenix of Broward, Inc. v. McDonald’s Corp. granted McDonald’s’ motion to dismiss for lack of prudential standing, and the Eleventh Circuit affirmed (joining the Third and Fifth Circuits in holding that prudential standing limitations applied to false advertising claims under the Lanham Act). Do you expect this trend to continue in other circuits?

I do. The courts are already overburdened; tossing cases where a judge can reasonably conclude that the plaintiff is not the litigant best suited to assert a claim is an easy way to lighten the load. I expect we will continue to see the courts express skepticism about expansive standing under the Lanham Act, especially where the plaintiffs are corporate customers or suppliers. Having said that, we are not at a point where a precise showing of injury is required, nor will we ever be. As I learned in the Joe Camel case, showing that an advertisement actually caused injury is a very difficult thing to do.

Q: What is your advice for a law student who wants to practice in the field? Given that most schools don’t teach advertising law, what are the best courses to take?

The Federal Trade Commission’s Bureau of Consumer Protection would be the ideal place to start a career in advertising law. If you intend to start in private practice, then I would suggest that you focus your job search on the leading advertising law firms. There are only a handful with sizeable practices that will provide a steady diet of advertising work: Kelley Drye (of course), Mannat Phelps, Reed Smith, Davis & Gilbert, Frankfurt & Kurnit, Venable, Loeb & Loeb. Interested students will want to get a summer associate position with one of these firms. As for recommended course work, I would not worry too much about it – this is an area that is better learned in practice than in the class room -- although classes that focus on unfair competition and trade regulation would not hurt. And of course, if you are at Georgetown, any class taught by Professor Oldham (my father-in-law) will ensure that you are ready for the rigors of the practice. You just can’t get enough Lord Mansfield.

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