In this Issue:
Trolls and Cybersquatters' Trademarks and Domain Names Under AttackTrolls may be cybersquatting on your trademarks or phishing off your company pier ― should you be concerned? Cybersquatting ― the registration of an Internet domain name that is identical to or similar to a registered or common law trademark ― has been a problem as long as the commercial Internet has existed. Phishing ― illegal use of a similar domain name or domain name incorporating a registered trademark to draw Internet traffic for, typically, fraudulent activities -- is a more egregious and costly theft of company customers and good will. There are a growing number of individuals and small companies – unaffectionately known as “trolls” ― dedicated to registering domain names of recently filed trademark registrations they locate through trolling public lists of trademark registrations. Most trolls will focus on common mis-spellings or alternative spellings of a trademark, assuming that the registrant has registered only the exact trademark as a domain. Trolls either cybersquat the name until a transfer fee (i.e., ransom) is paid by the trademark owner to get it back, or force the trademark owner to file a cybersquatting proceeding. Even worse, phishing trolls will build a fraudulent mimicking website to steal customers. While the sheer number of mis-spellings and alternative spellings makes it impossible for a trademark owner to preemptively secure all domain names, every trademark owner should have a process in place to simultaneously register a reasonable number of domain names simultaneous with first use of new trademarks. Waiting to secure domain names until after the trademark is registered with the United States Patent and Trademark Office may be too late. Trolls find registrations from daily common use and are often sophisticated enough to make a domain name registration in a matter of hours of registrations becoming public. The cost of recovering a domain name registered by a troll far exceeds the cost of implementing an internal domain name registration process that will pre-empt most of these attacks on your company’s intellectual property, particularly with annual domain registration costs of as little as $9.00 per year. Cybersquatting has grown tremendously in the last two years according to Internet Corporation for Assigned Names and Numbers (ICAAAN) and the World Intellectual Property Organization. Thus, it is more important than ever that domain name registration be monitored and implemented consistently as with the company’s trademarks.
Marketing and Promotion Law Update: Laying the Foundation
Federal, state and industry groups all regulate promotional marketing, from sweepstakes and contests, to coupons, giveaways and other promotions. In this world of cross-marketing and strategic partnerships, the company linking its brand to a promotion or co-promotion with other brands has a greater obligation to make sure that the promotion is legal, effective and surprise-free. While marketing opportunities and execution move fast, companies should not forget the partnership and vendor agreements needed to ensure the promotion meets or exceeds everyone’s expectations. For many in-house counsel, the first they learn of the promotion is when the ad copy is submitted for approval. However, in order to properly protect the company’s interests and ensure that the right agreements are in place, they need to hear about a promotion when the idea is hatched. Time-tested agreements exist to help define the relationships and responsibilities between the company and its partners, promotion and/or advertising agencies. We encourage our clients to make sure the foundation is set before the promotion is launched. Some common agreements include:
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Partnership, affiliate or joint promotion agreements
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Licensing and sublicensing agreements
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Name list, mailing list or list rental agreements, along with list management agreements
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Lead generation agreements
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Advertising agency agreements, promotion agency agreements, vendor and supplier agreements, or freelance agreements
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Sweepstakes fulfillment or contest management agreements
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Joint promotions agreements
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Sponsorship agreements
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Licensing agreements for broadcast rights, cable and major broadcast network agreements
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Nondisclosure and confidentiality agreements
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Agreements for licensing celebrities, music, images or product placement
Each contract is different and, of course, the exact terms will depend on the promotion. But if you want certainty and want to know exactly who is responsible to do what ― particularly when the unexpected happens ― having the right agreements at the outset will pay-off in the long run.
Quit Your Griping!: Life in the Blogsphere
That’s the response a lot of employers and service providers convey when a disgruntled employee or dissatisfied customer takes out their frustrations on the Internet. Gripe sites ― websites created by individuals to air their complaints about a particular company or individual ― are becoming increasingly popular as a mechanism to spout criticism or offer complaints about a former employer’s employment practices or a service provider’s workmanship.
These sites are created to implement derogatory terms and often times include the employer’s or service provider’s trademark either in the domain name of the site or within the content of the site. For example, domain names that use the phrase “sucks.com” or “ripoff.com” are a common gripe site tactic. Such words and phrases as “shoddy workmanship,” “incompetent,” “poor quality,” and “doesn’t know what he is doing” are routinely used to criticize a service provider’s or employer’s business practices. Some gripe sites have become so derogatory in their content that the targets of such attacks are fighting back in lawsuits for defamation and/or trademark infringement.
It is true that these gripe sites are annoying and potentially cause harm to the person/company’s reputation. They may negatively impact the business or profession of the target of the attack.
But, are these sites illegal?
Courts have held that the First Amendment protects critical commentary where there is no confusion as to the source of the website, even when it involves the criticism of the business. In other words, noncommercial gripe sites that do nothing more than offer running editorial on a conflict between the website creator and plaintiff do not create any possibility of confusion and do not violate the Lanham Act. However, a commercial website that uses another’s trademark to sell products, provide advertising or solicit donations may run afoul of the trademark laws. So, it is important to carefully analyze the content of the site and the manner in which the trademark is used to determine if defamatory statements or violations of the Lanham Act have taken place.
Online Copyright Infringement and the Digital Millennium Copyright Act
Copyright infringement on the Internet occurs in a number of ways. Infringers copy text from one site and put it on another; or republish digital images found on the Web, thinking it permissible to use them freely. We have all heard about the purportedly "massive" online infringement of sound recordings, which has prompted numerous lawsuits. And the news media has covered high profile cases like the one pending between Viacom and YouTube over the alleged infringement of audiovisual works posted to the popular video-sharing site.
The Internet presents certain challenges that did not exist for owners of copyrighted works in the pre-online era. With digital technology, one can make perfect copies, and through a broadband connection, that person can distribute those copies to innumerable users around the world. What used to require thousands of dollars worth of equipment, specialized training and a complex manufacturing facility, can now be accomplished with just a few mouse clicks and simple software that comes pre-loaded onto most computers. Moreover, defendants accused of using the Internet to infringe often hide behind a cloak of anonymity, which can be difficult and expensive to remove.
Many disputes involving online copyright infringement implicate the Digital Millennium Copyright Act ("DMCA"). The DMCA provides a mechanism for copyright owners whose rights are being infringed online to notify the service provider that copyright infringement is occurring. The service provider has an incentive to quickly remove the material alleged to be infringing because doing so will help bring that provider into a "safe harbor" for copyright infringement liability. The DMCA shields service providers from liability for infringement committed by users of the service so long as, among other things, the service provider acts "expeditiously" to remove or disable access to (i.e., take down) the material claimed to be infringing.
So the DMCA provides an effective tool to reduce some of the more troubling aspects of litigation over online copyright infringement. Its "notice and takedown" procedures give an easy method for copyright owners to have content removed without resorting to litigation seeking injunctive relief. And the safe harbor protection gives providers peace of mind to develop online infrastructure with less concern over numerous potential infringement lawsuits.
For further information, please contact Christopher J. Borders or Kourtney A. Mulcahy, or your regular Hinshaw attorney.
This newsletter has been prepared by Hinshaw & Culbertson LLP to provide information on recent legal developments of interest to our readers. It is not intended to provide legal advice for a specific situation or to create an attorney-client relationship. |