March 8, 2018

sweepstakes-law
Sweepstakes Lawsuit

After winning its federal sweepstakes lawsuit against promotional contest sponsor Kizzang LLC (“Kizzang”), the National Collegiate Athletic Association (“NCAA”) has requested recovery of over $242,000 in attorneys’ fees from Kizzang.

Why is Kizzang footing the NCAA’s six-figure legal bill?

NCAA’s Sweepstakes Lawsuit

Kizzang sponsors games, sweepstakes and contests through its Web and mobile platforms.  As we have previously reported, the NCAA sued Kizzang and its owner/founder in March 2017 in the U.S. District Court for the Southern District of Indiana (Case No. 17-cv-712), alleging that the defendants infringed upon and diluted the NCAA’s famous FINAL FOUR and MARCH MADNESS marks by planning to use the marks “FINAL 3” and “APRIL MADNESS” in connection with the March Madness college basketball tournament and Final Four round of play.

Because the defendants did not formally answer or otherwise respond to the NCAA’s sweepstakes lawsuit within the time allowed, the Court granted the NCAA’s motion for default judgment, permanently enjoining Kizzang and its principal from using the “FINAL 3” and “APRIL MADNESS” marks and holding the defendants liable for the NCAA’s attorneys’ fees.

NCAA’s Legal Bill

On February 23, 2018, the NCAA requested recovery of its legal fees in the amount of $242,213.55 and submitted records of the nine attorneys, five paralegals and a research librarian who worked on the case.  Despite the defendants’ default, the NCAA claims that its legal fees in the sweepstakes lawsuit had “considerably increased” as a result of numerous (unsuccessful) motions filed by the defendants.

This Tuesday, following a status conference with the parties, the Court instructed the defendants to respond to the NCAA’s attorneys’ fees request by Thursday, March 29, 2018.

Is Your Sweepstakes Promotion Legally Compliant?

When administered effectively, promotional contest and sweepstakes advertising has the potential to create a lot of buzz (and revenue) for the subject sponsor.  However, as the above-referenced sweepstakes lawsuit illustrates, unanticipated legal issues can prove costly or even fatal for a sweepstakes promotion.

Many sweepstakes-related regulatory and legal risks can be minimized or eliminated entirely by working with experienced marketing counsel before launching a promotional contest.  Well-planned promotions can help protect contest and sweepstakes sponsors and their respective marketing partners from substantial liability.  Additionally, a sweepstakes lawyer can help promotion sponsors address a number of legal concerns and industry best practices related to intellectual property, contest rules, sweepstakes advertising, consumer privacy, registration and bonding requirements, as well as other areas of compliance.

If you are interested in learning more about this topic or pursuing a sweepstakes-related venture, or if you have been served with legal process in connection with your marketing practices, please e-mail us at info@kleinmoynihan.com, or call us at (212) 246-0900.

The material contained herein is provided for informational purposes only and is not legal advice, nor is it a substitute for obtaining legal advice from an attorney.  Each situation is unique, and you should not act or rely on any information contained herein without seeking the advice of an experienced attorney.

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