Enterprise Digest

All of the important news and exclusive analysis you need, delivered to your inbox every Friday

Both “greenwashing” and “AI washing” have been of interest to regulators as of late as companies continue to make marketing claims that to cater to consumers and/or business clients that run afoul of reality. Recent actions by the United Kingdom’s Competition and Markets Authority, which is tasked with strengthening business competition and preventing and reducing anti-competitive activities, and the U.S. Securities and Exchange Commission shed light on how these entities (and presumably other related bodies) are addressing false and/or misleading advertising. 

> On the “green” front: The United Kingdom’s Competition and Markets Authority announced this week that it has secured “landmark changes from ASOS, Boohoo and Asda, following an investigation into the three retailers back in July 2022, “having identified concerns of possible greenwashing during its initial review of the fashion sector.” No small players, the CMA stated that ASOS, Boohoo and George at Asda collectively generate annual sales of £4.4 billion in the UK, alone. 

> On the AI front: The Securities and Exchange Commission (“SEC”) took action of its own recently, announcing on March 18, that it had settled charges against two investment advisers, Delphia (USA) Inc. and Global Predictions Inc., for making “false and misleading statements about their purported use of artificial intelligence.” The firms agreed to settle the SEC’s charges and pay $400,000 in total civil penalties.

Some Litigation Updates …

> Mitchell v. NY and Co: New York & Co. cannot escape a class action suit accusing it of using false reference pricing to dupe consumers into believing that they were receiving a substantial discount. (You can find the C.D. Cal. order here.)

> New York Times v. OpenAI, et al: Microsoft is looking to bolster its motion for a partial dismissal, arguing in a new memo that the Times offers “no solution for the complaint’s core deficiency: that it alleges not a single real-world instance of someone using the GPT-based products in a way that [its] rights or harms its interests.” 

> J. Doe v. Github: The plaintiffs in a separate AI-centric suit are pushing back against OpenAI’s motion to dismiss, arguing in a newly-filed opposition that they sufficiently alleged that the generative AI giant violated the DMCA and engaged in contract breaches by failing to license the computer code at issue. 

> Andersen v. Stability AI, et al: And in yet another AI case, a trio of artists are opposing Stability AI and co.’s motions to dismiss on the basis that they have sufficiently alleged that Stability AI induced copyright infringement and violated the DMCA. (The Stability AI-specific opposition is here.)

In some deal-making news this week …

• The Brandtech Group, a generative AI-focused marketing company, has raised $115M in a Series C round.

• iCustoms.AI has raised $2.2M in Seed funding to simply the complex customs clearance process using AI.

• Diesel & Margiela-owner OTB Group has acquired Italian footwear manufacturer Calzaturificio Stephen.

• Uzum, a digital services ecosystem co., has raised upwards of $100M in funding through a combination of a Series A round & debt financing.

• Sustainable sourcing platform Circular.co has raised $10.5M in new financing.

  
  

– Julie Zerbo
Founder & Editor-in-Chief

Here are TFL’s top articles of the week …

1. MetaBirkins-Maker Cites First Amendment in Fight Over Museum Inclusion. Rothschild is pushing back against a court’s refusal to find that he would not run afoul of an injunction awarded to Hermès if he were to permit the display of his infringing works in an art exhibition.

2. Our monthly Enterprise Deep Dive is here …  What Does Extended Producer Responsibility Look Like for Retail?

3. Kim Kardashian, Design Co. Sued Over Fake Donald Judd Furniture. Kim K is among the parties named in a TM & © infringement, false advertising & unfair competition lawsuit filed by the Judd Foundation this week.

4. Why It’s Hard for Brands to Stay True to Their Activist Roots Post-Buyout. “The group had become obsessed with publicly displaying sustainability credentials at the expense of focusing on the fundamentals of the business.” 

5. An Ongoing Case Asks Whether adidas Failed to Disclose Yeezy-Related Risks. One of the most interesting aspects is the allegations that adidas had a duty to reveal Ye’s misconduct in accordance with the EU’s Non-Financial Reporting Directive. 

6. What an adidas, Arc’teryx Case Says About Trademarks, Competition. Little more than a simple TM scuffle on the surface, a closer look at the multi-pronged clash between adidas & Arc’teryx suggests that this is just as much a competition-centric squabble.

7. Second Circuit Takes on Case Over Saks, Luxury Brands’ “No Poaching” Pact. A case over an “anticompetitive” scheme that allegedly saw Saks conspire with luxury brands to control the wages & job conditions of luxury retail employees went before the 2nd Cir. on Monday.

8. Generative AI Could Leave Users Holding the Bag for Copyright Violations. One problem is that output from an AI tool can be very similar to the underlying ©-protected materials it was trained on, such as books, articles, artworks, etc.