Duff on Hospitality Law

Room Key, a brand new player in the on-line hospitality market, launched in beta on January 11, 2012 to some excitement and some hard questions. Room Key is a joint venture among six U.S.-based hotel chains—Choice Hotels International, Hilton Worldwide, Hyatt Hotels*, InterContinental Hotels, Marriott International* and Wyndham Hotel Group—that allows users to search for available rooms at almost all of the chains’ global properties, or about 23,000 rooms total. More Kayak than Expedia, users search the Room Key site for inventory and are then redirected to the individual property (or chain’s) home site to complete booking. The idea is to drive traffic to the hotel websites and away from on-line travel agencies (OTAs) like Expedia, Priceline, and Travelocity. And, of course, to provide a customized, personable hotel booking experience to the user--and who better to do that then a group of hoteliers--says CEO John Davis.

If you have a trademark that is registered with the United States Patent & Trademark Office before September 1, 2011, and you are not in the adult entertainment business, you should consider making a pre-emptive registration of the URL [your trademark].xxx now, to prevent someone who is in the adult entertainment industry from registering it later.

(Companion post to “Do You Know What’s Happening on Your Network? Copyright Infringement.”)

A number of organizations, such as the Electronic Frontier Foundation and Chilling Effects, keep watch on what they consider overly aggressive policing of rights on the Internet by owners of copyrights and trademarks. Lately, a couple of extremely irate attorneys have taken up the cause against Getty Images and its ilk, going so far as to call them extortionists. BMI, ASCAP and SESAC are widely loathed in every industry but their own. Copyright owners these days are, depending on who you talk to, defending their rights against millions of infringers on the Internet, or filing lawsuits they never intend to pursue to make money by forcing settlement in a last, desperate attempt to prop up a business model that is doomed to failure in the Web 2.0 age. Either way, there seems to be a significant increase in policing of potentially illegal copying and use of protected materials that may find its way to you.

Customer Internet access, preferably wireless, is expected in the hospitality industry. Unfortunately, some guests and customers use the Internet access and computer networks you provide to break the law. Specifically, they infringe copyrights by uploading and downloading illegally obtained copies of movies, songs and television clips that are probably themselves illegally obtained copies of copyrighted works, which enterprising persons then illegally post to publicly available Internet sites for download or further sharing (read: illegal copying).

The Federal Drug Administration (FDA) has released its long anticipated draft regulations about menu labeling, which describe how the agency intends to enforce Section 4205 of the Patient Protection and Affordable Care Act of 2010, signed into law by President Obama just over a year ago. The FDA is accepting comments from the public on the proposed regulations until June 6, 2011.

Back in December, my colleague Greg posted “Premises Security 101,” noting the increased attention our clients were paying to premises security issues. As it turns out, they were right to do so. Less than two months later, on February 7, 2011, a King County jury decided that Denny’s owed three plaintiffs $46.4 million in total for injuries sustained when a patron shot into a Denny’s Restaurant in Kent with a semiautomatic gun. According to plaintiffs’ attorney Ron Perey, this was the largest personal injury verdict ever rendered in the State of Washington; however, Denny’s insurance company settled the case for $13 million before the jury delivered its damage award.

Just to be clear, the man who shot plaintiffs Steve Tolenoa, Lisa Beltran-Walker and Carl Walker was not employed by or otherwise related to Denny’s or its management or the owner of that particular Denny’s. Frank Evans was a violent drunk guy who showed up after the bars closed, picked a fight with another patron, lost it, got mad, left and came back with a Glock .40, which he used to shoot up the restaurant (11 bullets). Mr. Evans was convicted on multiple counts of first-degree assault and is currently serving a 62 year sentence in state prison.

Greetings from an unusually cold Houston, location of the 2011 Hospitality Law Conference, sponsored by HospitalityLawyer.com. I attended a number of interesting sessions over the course of two and a half days including the one that is the topic of this post: legal concerns that arise with holding contests and sweepstakes that result in the award of prizes.

No doubt you’ve seen advertising for these kinds of promotions: “Submit your favorite photo of a stay at our hotel and win a free night!” “Leave your business card for our monthly drawing and win a chef’s menu dinner with wine pairings for 2!” “After your cucumber eye treatment, enter your name for a chance to win a shiatsu massage with reflexology finisher!”  Contests and sweepstakes are immensely popular marketing tools throughout all retail markets, including hospitality. I myself have shed business cards all over Seattle, chasing dreams of chic meals taken at funky, retro hotels (with free wi-fi). Contests and sweepstakes can be as simple as dropping a card in a fishbowl or as complicated as shooting, editing and submitting a polished six-minute animation short to be judged in a “contest of skill.”

A word on terminology: the speakers defined a sweepstakes as a promotion in which prizes are awarded by chance versus a contest (or contest of skill) in which entrants must perform an action—answer a trivia question, write an essay, paint a picture—in order to be judged for a prize. Prizes in contests are based on skill and not luck.

The primary focus of the session yesterday was the importance of making sure all sweepstakes and contests stay on the right side of the line that separates a fun and useful marketing tool from an un-fun, illegal gambling operation (lottery). Every state regulates gambling, games of chance, lotteries—in short, if you aren’t the government, or aren’t licensed by the government, don’t run a lottery.

The Washington State Liquor Control Board has issued a Notice of Rule Making for a proposed amendment to the Washington Administrative Code (WAC) prohibiting the manufacture, importing and sale of “alcohol energy drinks.” The Board defines alcohol energy drinks as any beverages containing beer, strong beer or malt liquor and “caffeine, guarana, taurine, or other similar substances.” The public may comment on the proposed rule until February 23, 2011.

This new rule is virtually identical to the emergency rule adopted by the Board on November 10, 2010, which is currently in effect and will continue until March of this year. Unlike the emergency measure, the proposed rule contains language making clear that the prohibition is not intended to extend to substances in which coffee and chocolate are added to alcohol. Irish coffees and liquored chocolates are still safe!

This week, the Washington Lodging Association (WLA) brought together law enforcement officers, intelligence analysts and advisors from the Washington State Fusion Center and the Department of Homeland Security (DHS) to discuss hotel security, particularly in the context of terrorist attacks and large-scale natural disasters.

Broadcast Music, Inc. (BMI) filed suit against the Lake Street Bar & Grill in Kirkland and its individual owners on October 20, 2010, alleging four counts of willful copyright infringement for “unauthorized public performance of musical compositions in BMI’s repertoire.”  BMI asked the court for statutory damages—not BMI’s proven lost revenue, but damages that the U.S. Copyright Act allows copyright owners to request if they don’t want to bother with calculating actual damages. The court may order damages in any amount between $750 and $30,000. Even worse for Lake Street, if the allegation of willful infringement can be proved, the court may award BMI up to $150,000 under the same statute.

Remember, this is for only four separate instances of copyright infringement.