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CBS Sued for Virtual Advertising on Building Use of virtual ads, however, raise an array of business and legal issues. Ronald R. Urbach Craig M. Mersky e-mail this article URL CBS' broadcast of the Millennium New Year's celebration live from Time's Square has landed the network in court. OTS Signs, the owners of the One Times Square Building and home to the New Year's Eve ball, have filed suit in New York federal court claiming CBS engaged in unfair competition, deceptive trade practices and trespass for placing a virtual ad on their building. It seems that the location chosen for CBS anchorman Dan Rather to broadcast from was not only the ideal vantage point to view Times Square and the New Year's Eve ball, but also to highlight an enormous billboard of the NBC peacock logo. So CBS hired a company called Princeton Video Imaging ("PVI") to capture its live video feed, place a CBS logo over the NBC peacock, and relay the new image to viewers. Although there has been no public reaction from NBC, OTS Signs' is claiming foul because CBS not only placed its advertisement on their building without paying for it, but also because advertisers who pay big money to place ads on their building which is featured during the Times Square New Year's bash may no longer do so. Mr. Rather, in a telephone interview with the New York Times, expressed regret for the logo switch which he called "a mistake." In his view, CBS should at least have "pointed out to the viewers that we were doing it." The President of CBS Television Leslie Moonves, however, justified the switch, and in the same New York Times article stated "anytime there's an NBC logo up on our network, we'll block it again." This digital technology has been used before on television to enhance broadcasts of sporting events. Companies like PVI and its rival Sportvision, for example, are responsible for placing the digital red line on the football field indicating the first down marker and the highlighting of the puck during an hockey game for the viewer's benefit. Incidentally, PVI and Sportvision are currently in a legal battle over patent rights to this technology. Virtual ads have also been used on the CBS early morning program, "The Early Show," to superimpose the CBS logo on the back of horse drawn carriages, and in baseball games placed ads behind home plate. Virtual ads are becoming more popular because of several advantages to advertisers and their clients. Unlike traditional outdoor media, virtual ad placements can be altered for different geographical regions. For example, during the broadcast of a baseball game, a virtual ad for a brand of coffee can be placed on transmissions to the New York area while an ad for suntan lotion can be placed on transmissions to Florida. In addition, the ad placement is less permanent allowing for greater flexibility. Instead of paying a lot of money to place a billboard ad behind home plate for an entire season, advertisers can pay less to have it temporarily digitally added. Use of virtual ads, however, raise an array of business and legal issues. Take the baseball game illustration, for example. Does the network or the stadium owner get to choose whose virtual ad is placed during the broadcast? Can the network place a virtual ad of a company that competes with an another's billboard ad? These issues can be contractually dealt with, but what about situations similar to CBS' New Year's broadcast. There, CBS altered its own broadcast image of the building by inserting the CBS logo and did not actually place anything on the building. Arguably, CBS' decision to substitute its own logo for NBC's was not completely ethical, especially for a news organization. However, to impose a legal penalty for doing so may prove to be problematic. For instance, a ruling against CBS would, in effect, grant property owners certain rights to control digital images of their property. © 2000 Davis & Gilbert LLP       Davis & Gilbert LLP • 1740 Broadway • New York, NY 10019 tel: 212.468.4800 • fax: 212.468.4888   Privacy Policy • Terms & Conditions