Last August, we reported that the U.S. Court of Federal Claims had dismissed a lawsuit related to the Federal Trade Commission (the “FTC” or “Commission”) sponsorship of a contest promoting robocall-blocking technology, siding with the FTC and its contest rules. The plaintiff, who appealed the claims court’s decision to the Federal Circuit, maintains that the Commission breached its contest rules.
How can well-drafted contest rules help protect sweepstakes and contest sponsors?
Claims Court Enforces Contest Rules
In 2012, the FTC sponsored its Robocall Challenge, which offered a $50,000 prize for the best new robocall-blocking technology proposed by a contestant. In August 2013, a disgruntled contestant sued the Commission, claiming that the FTC materially breached the contest rules by allegedly passing over his submission without affording him a fair opportunity to win.
Looking to the Commission’s contest rules, the trial court found that the contest judges’ decision was final and binding and granted the FTC’s motion for summary judgment.
Plaintiff Apparently Faces Pushback on Appeal
After appealing his loss to the Federal Circuit, in oral arguments held on September 7, 2016, the subject plaintiff argued that the robocall contest’s judges had misapplied the contest rules.
Law360 reports that Judge Timothy B. Dyk was not impressed with plaintiff’s counsel’s stance, rejoining that “You’re relying on your interpretation of the rules and the problem is you can’t challenge the judge’s interpretation of the rules.”
Contest Rules: More Than Just Boilerplate
As the above-referenced case illustrates, well-drafted contest rules can help protect contest and sweepstakes sponsors from substantial liability. As such, before sponsoring any contest, sweepstakes or other promotion, businesses should retain an experienced marketing attorney to help formulate the contest and draft associated contest rules.