The Small-Business Owner's Guide to Advertising Injury

Chapter 2: What Counts As Advertising Injury?
Case Study: A Celebrity Misappropriation Lawsuit

Actress Katherine Heigl of Grey's Anatomy and Knocked Up fame is suing Duane Reade Inc. for using her name and image to promote the New York based drug store chain without her consent. This is a classic case of misappropriation, folks.

Screen shot of Duane Reade tweet re. Katherine Heigl.It all started when Duane Reade tweeted "Love a quick #DuaneReade run? Even @KatieHeigl can't resist shopping #NYC's favorite drugstore" from its Twitter account. The tweet included a paparazzi photo of Heigl carrying Duane Read shopping bags. The tweet has since been removed from Twitter, but you can check out a screenshot.

Heigl's lawyers are arguing that the paparazzi photo depicts the actress "in a private moment looking away from the camera" and, because of this, "improperly exploited the plaintiff's name and likeness as a celebrity, for [the] defendant's commercial advertising and purposes of trade, without authorization."

Citing her celebrity status, Heigl is demanding $6 million in damages from Duane Reade. The actress has stated that she plans to donate the judgment to the Jason Debus Heigl Foundation, which helps find homes for dogs in need.

Sound ridiculous? Forbes offers its analysis of the situation via a guest post by social media and business law expert Andrew Udin. Udin suggests that while Heigl might not get the full $6 million, she has a legitimate case. He points out that…

  • Celebrities still have rights. Udin explains that just because celebrities live their life in the public eye, others do not have the right to exploit them.
  • The post may have misled followers. Duane Reade has over two million Twitter followers and 100,000 Facebook "likes." Udin suggests it's likely that the tweet led some fans to believe that Heigl had some kind of formal relationship with Duane Reade. Which leads us to…
  • The post could have caused Heigl a loss. Udin points out that celebrities like Heigl can and do make money for promoting various brands — they don't work for free. And to further that thought: you can imagine that if it was deemed "legal" for companies to use celebrities in advertisements for free and without their permission, formal celebrity endorsement my no longer be in such high demand.
  • It looks a lot like advertising. The Forbes article points out that Duane Reade will likely argue that the tweet was not intended as "commercial advertising" and that no formal relationship was implied. But why else use a celebrity photo if not to promote your brand in the hopes of generating more business?
  • There is precedent. As Udin points out, there is a long history of celebrities filing misappropriation cases against businesses — and winning. The article uses a Michael Jordan — Jewel-Osco case from 2009 as an example. The grocery chain used a photo of Jordan in an ad congratulating him on his Basketball Hall of Fame induction. Jordan sued and the courts sided with him.

As you can see, taking liberties with another person's image, name, or words is risky business. In the next sections, we talk about the common — and sometimes costly — mistakes that small-business owners make when using social media.

Update: According to reports from Reuters, Heigl and Duane Read settled out of court. While the terms of the settlement were not disclosed, sources note that the drugstore chain will donate money to a charity chosen by Heigl.

Next: Chapter 3: Social Media Mistakes That Cost Small Businesses Big

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