Hey everyone happy Aloha (wet, if you are on Oahu) Friday. Today’s topic will focus on the CAN-SPAM Act. The spam in your e-mail, and not the kind we eat with our musubis here in Hawaii.

However, before I get to it just a reminder I have a talk at The Box Jelly next week Tuesday on “Protecting Your Brand: An Overview of Intellectual Property Laws for Small Businesses.”  Read the information here.

What is the CAN-SPAM Act?

The CAN-SPAM Act of 2003 (15 U.S.C. § 7701) created a national standard for sending commercial email or electronic communications and requires that the Federal Trade Commission (FTC) to enforce its provisions. It derives its name from the abbreviation of the full title: Controlling the Assault of Non-Solicited Pornography and Marketing Act.

So if you are using email or other similar ways to reach customers, then you want to pay attention. CAN-SPAM basically sets the rules for commercial emails – what can go in them, the right for recipients to have you stop sending them these messages, and comes with hefty penalties for violation.

Specifically, the CAN-SPAM Act makes it, “unlawful for any person to initiate the transmission to a protected computer of a commercial electronic mail message or a transaction or relationship message that contains or is accompanied by header information that is materially false of materially misleading.”

Remember last week’s Draw the Law about materially false in your advertising? It is a similar concept here. The goal with the law is to prevent mass advertising to trick people into buying products and services, especially since it is so easy to send bulk e-mail.

What is Covered?

The law defines a commercial message in the context of the CAN-SPAM Act, as “any electronic mail message the primary purpose of which is the commercial advertisement or promotion of a commercial product or service,” which includes those emails that promote content on a commercial website.

In addition, the law makes no exception for B2B email and it means ALL email in this context. So if you have a former customer list, and send them out a reminder of a sale, that e-mail reminder MUST comply.

In addition, a line of court decisions has applied the CAN-SPAM Act to social media; in particular, in the situation of Facebook, a court concluded that “electronic mail message” includes messages sent within Facebook using Facebook’s variety of messaging systems.

What’s the Cost?

EACH separate e-mail that is in violation of the Act is subject to penalties of up to $16,000. Yes, I said EACH, so non-compliance can be costly. Fortunately, compliance is simple.

How do I Comply?

Here is the list of things you should be following:

  1. Don’t use false or misleading header information.  The From/To/Reply-To lines must ID the business/person that initiated the message.
  2. Don’t use deceptive subject lines. The subject should match the contents.
  3. Identify the message as an ad. Be clear and conspicuous.
  4. Tell recipients where you’re located. Your message must include your valid physical postal address, which can be an actual address or a P.O. Box.
  5. Tell recipients how to opt out of receiving future e-mail from you. Whether the customer has to email you back or clicks off, the main point here is make it easy for them to never receive an e-mail from you again. They have every right to opt-out.
  6. Honor opt-out requests promptly. Your opt-out processing needs to be able to handle an opt-out request at least 30 days after you send the message, and you must honor a recipient’s request to never bother them again within 10 business days. Don’t charge fees, ask for extra information, or anything else. Sever the connection.
  7. Do not sell or transfer the collected e-mail addresses. Once a recipient has told you that they want to opt-out that is it. This includes in the form of a mailing list. Exception: You can transfer those e-mails with a company that has been hired by you to comply with the Act.
  8. Monitor your affiliates and hired advertisers. Even if you outsource your marketing and advertising YOU are still responsible under this law. It cannot be contracted away. You and your hired advertiser, both may be held responsible.

And that is the CAN-SPAM Act in a nutshell.

I would like to briefly mention that I talk about this subject in my talk on Social Media and the Law due to the recent court decisions. If you are interested in coming to one of my talks check out the information here.  Also don’t forget to “Subscribe” to this blawg!

*Disclaimer:  This post discusses general legal issues, but does not constitute legal advice in any respect.  No reader should act or refrain from acting based on information contained herein without seeking the advice of counsel in the relevant jurisdiction.  Ryan K. Hew, Attorney At Law, LLLC expressly disclaims all liability in respect to any actions taken or not taken based on the contents of this post.

Last post was about creating a Social Media Policy with respect to the employer-employee relationship.  The idea is to minimize potential suits between the employee and employer.  Issues like prohibiting certain behaviors, such as posting negative comments or former employees taking company information should be the concern with an internal policy.

However, many businesses are coming to realize the potential power of blogs, Twitter, and Facebook and readily use social media as a marketing and advertising tool.  And why not?  It is free, relatively easy to set-up, and allows you a good amount of control over content.  However, just like internal disputes you can quickly wind up with external disputes with other companies, commenters, and the like over issues of intellectual property infringement and defamation.

Advertising Statements: Puffing Yourself Up and Tearing Down the Competition

FTC and Endorsements: Disclose Your Relationship

Generally, marketing, advertising, and public relations specialists are comfortable with using mere words of puffery.  They also know that it has been the law that if an ad features an endorser who’s a relative or employee of the marketer or if that endorse has been give something of value in exchange for praise of the marketer’s product or service the ad must disclose the connection.  The point is that knowing about the connection helps the reader or watcher evaluate the quality of the endorsement.

This attitude comes into play when using social media as well.  Specifically, the FTC has issued guidelines about how bloggers, and social media specialists talk about a company’s product or services.  This includes your employees, as well as any marketer, advertiser, or in generally someone speaking on your behalf and you give them something expecting endorsements.

Say you have a new delicious musubi (rice ball) that you want people in Honolulu to know about.  One of your employees is a well-known food blogger.  You give her a sample of the product with the intention that she is to eat it and then rave about it on her blog.  If she does not state that she is your an employee you would be violating the FTC guidelines.

Defamation: Don’t Start Ugly Rumors

On the flip side is going after the competition.  If you or your employees typically engage in discussions via Twitter, Facebook, or comments on your company’s blog you may sometimes start joking with one another.  It is easy to see that this leads to making fun of the competition’s products and services.  However, going too far may mean making false statements that damages their reputation.  In this situation, you may be slapped with a defamation suit.

The general better policy in a situation like this is to remind people to be positive in their postings rather than taking the low road.  Above all do not engage in the rumor mill thinking that the amount of information going out there will protect you.  Once something gets sent out onto the Internet it is almost impossible to take back.  Just look at some of our politicians and celebrities to realize the truth of that fact.

Intellectual Property: Using Other Works

Many people love to share images or quotes on their Facebook posts, Twitter feeds, or blogs.  Generally, they search the web for a cute image and slap it on their post and think they are done.  While, they think that is ok, what they are unaware is that they are infringing on the person who took or made that image’s intellectual property (IP) rights.  When it comes to business the stakes are higher because the owner believes you are using their working to make a profit.

Copyright and Trademark Infringement

In general, when using images and phrases the best policy is to create your own or license it out.  Do not take images and words from another’s website and slap it on your own trying to claim it as your own.  For a prime example of this you can look at my own blog.  Many of the images I use are stock photos,  if I were to go to another law firm’s website and start taking their images and pdf files and posting them here, and claiming them as my own those would be violations of the firm’s intellectual property rights.  While, there may be a  “fair use” exemption it is less likely you will get to use it for your money-making company blog, Twitter, or Facebook page.

Best policies are to create or license the images you want to use, be sure to use attribution links and short quotes from another site.  The last thing in the social mediaverse is you want to be known as a thief of people’s IP.  Always clear use of photos, music, works, etc . . . if you don’t know where they come from.

By the way, remember that people do have publicity rights this includes their image, likeness, and name much like a company controls their trademarks and copyrights, celebrities and people control their image.

Last Words

Next week, I will wrap-up this section with some general tips of crafting a policy and what to think about and some other miscellany.  In general, if you are concerned or feel that your company and employees need a re-training or updating on social media and the laws talk to an expert and have an attorney review and draft your policies.

Don’t forget if you enjoy this series or any of the other series on my blawg feel free to subscribe in the right-hand corner of this page to receive e-mail updates on posts.  If you are on Facebook be sure to “Like” “Ryan K. Hew” to get updates there as well.

See you next time!


*Disclaimer:  This post discusses general legal issues, but does not constitute legal advice in any respect.   No reader should act or refrain from acting based on information contained herein without seeking the advice of counsel in the relevant jurisdiction.   Ryan K. Hew, Attorney At Law, LLLC expressly disclaims all liability in respect to any actions taken or not taken based on the contents of this post.