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Advanced Technology Seminar-

Intellectual Property Online (Continued)

Cyrus Daftary & Todd Krieger

February 11, 2013

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Agenda

Administrative Discussion Trademarks Patents Questions & Answers

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Administrative Discussion

Group Selection

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Trademarks

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Trademark: Definition

A trademark is a word, name, symbol, or device used to identify and distinguish the source of goods.

Focus is on consumer protection. Rights are derived from use in commerce

and enhanced by registration.

15 USC 1051

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Who are Trademarks Designed to Protect?

Trademarks are for consumers’ benefit.

Help distinguish source of goods or services.

Provides consumers a way to ensure consistent quality.

Trademark holder has a right to prevent consumer confusion

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Trademark Holder’s Other Rights

To prevent the appearance of affiliation, connection, association, or sponsorship.

To prevent misrepresentation of the nature, characteristics, or quality of goods or service.

• (15 USC 1125 (a))

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Trademark Fair Use - registration does not confer absolute rights.

TM law seeks to protect consumers, not provide registrant with a monopoly of the English language.

Descriptive terms are not protected unless they acquire secondary meaning. (Park n Fly). (Secondary meaning does not automatically mean dilution).

Parody and commentary is protected by 1st Amendment (www.ballysucks.com).

Comparative advertising in encouraged in the U.S., but not worldwide.

Often restricted to category of goods and services.

http://creativefreedomdefense.org/fc_1.htm

Malted Barbie

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Trademarks Online

Potential areas of controversy:

Domain names. Meta-tags and key words. Brand names mentioned within the site.

– Attribution– Bait and switch

Words hidden within the site.

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Online Definitions

Domain names:– Unique Internet addresses which can be numeric

(123.456.123.12) or alphanumeric (www.suffolk.edu). – Registrars listed at www.icann.org/registrars/accredited-list.html.

Top Level Domains: ‘.com,’ ‘.edu,’ ‘.us,’ etc.

Meta tags / Key words: – Meta tags are part of the HTML (hypertext markup language) which is

not visible within the web site without viewing the source code.– Used by some search engines to index sites (AltaVista, HotBot, Infoseek and Webcrawler).

Other search engines may be sensitive to ‘invisible ink.’

– Key words are search terms that trigger advertising within a search engine.

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Online Definitions (cont.)

ICANN: Internet Corporation for Assigned Names and Numbers.– Non-profit organization for domain name system

management and other related functions.– Took over for government contractors.– Sometimes controversial (but it is hard to keep everyone

happy!) www.icann.org.

Whois: database of domain name registrants: http://www.networksolutions.com/cgi-bin/whois/whoishttp://www.allwhois.com

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Hidden text within a site

Meta tag example.– http://www.fashiondrops.com

<meta name="description" content="Prada shoes sneakers and Gucci sneakers shoes are most fashionable Fall Winter 2011/2012 men and women collections." />

<meta name="keywords" content="prada sneakers, prada shoes, gucci shoes, gucci sneakers, mens prada shoes, mens gucci shoes, mens prada sneakers, mens gucci shoes, gucci shoes for men, prada shoes, for men," />

Search term example (www.ebay.com). 130790192632

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Common Domain Name Disputes:

Cybersquatters Multiple trademark holders, but one ‘.com’ available. Generic terms (crew.com) Misspelling of trademark (yahool.com) Acronyms (Computer Design Services = CDS.com) Parody, criticism, and “sucks” sites (peta.com) Famous names (including fan sites) Reverse Cybersquatting - corporation that was late sues

lawful registrant.

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Domain Name Controversy

Client owns “club.com” and used it as an e-mail server since 1994. Recently used for club listings in the New York area.

Winner Holdings PLC, makers of “The Club,” want client to cede ownership. Sends clients a strongly worded e-mail, followed by a threatening letter

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Domain Name Controversy (Cont.)

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Solution

They acquire “Theclub.com.”

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New Problem - Ever hear of Club Magazine?

Adult magazine “club” claims that the public associates the term with their magazine:

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Why Are Domain Names So Significant?

No comprehensive directory of web addresses, so consumers often guess the domain name.

Over 100 million domain names registered - not too many good ones left! (Source: WIPO)

Top level domains, aside from ‘.com’ have not attracted the same degree of prestige or attention.

Domain names have sold for over $1 million. High profile sales (Greatdomains.com):

– $3,000,000 Loans.com – $1,000,000 Beauty.com– $835,000 forsalebyowner.com.

Business.com Domain name

Sold in 1997 for $150k Resold in 1999 for $7.5 million Resold in 2007 for $345 million Purchaser files for bankruptcy in 2009.

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Many Domain Names are Still Valuable

http://www.businessinsider.com/the-10-most-expensive-domain-names-of-2012-2012-12

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Online Trademark Lawsuit Toolbox

Causes of Action:

Federal and State Trademark infringement (likelihood of confusion) - same product class.

Federal and State Trademark Dilution - Blurring / Tarnishment - any product class.

State and federal unfair competition. Federal Anti-cybersquatting statute ICANN dispute resolution procedure.

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Anti-Cybersquatting Consumer Protection Act

Remedies:– Potential damages for domain names registered

after 11/29/99 (and perhaps prior – Sporty’s).

– In rem jurisdiction where domain name is registered.

– Domain names of a living person registered for profit and without consent

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Trademark Cyberpiracy PreventionAnti-cybersquatting Consumer Protection Act

15 U.S.C. §1125 (d)(1) - A person shall be liable in a civil action by the owner of a mark if…– bad faith intent to profit from the mark and– registers, traffics in, or uses a domain name that:

Identical or confusingly similar to a mark. Identical, confusingly similar or dilutive of a famous

mark…

– Damages from $1,000 to $100,000.– Http://thomas.loc.gov

S. 1948 Intellectual Property and Communications Omnibus Reform Act of 1999

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ICANN DisputeResolution Policy

Effective for:– Domain name dispute under the primary top level domains

(.com, .net, .org., .edu., etc.).– Jurisdictions and registrars that adopt the ICANN policy.– Including names not in commerce.– Allows ‘in rem’ proceeding. (Porsche 51 F. Supp. 2d 707).

– Does not allow suspension of a name during the dispute.– Must prove similarity with trademark; establish that there

was no legitimate interest and prove bad faith.• www.icann.org/udrp/

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Domain Name Dispute Resolution is Unpredictable and Potentially Biased Approximately 85% of complainants prevail in

arbitration (ICANN statistics):– Many do not even respond to the arbitration notice.– Others quickly cede their domain names without a

dispute.– Some settle before the parties arbitrate.

Biased toward trademark holders. Decision can be appealed to a court of competent

jurisdiction.

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ICANN Dispute Resolution (cont.):

Class discussion: Icann website Compare Pueblo.net to Pueblo.com - should a

small grocery chain prevail over the domain name registrants?

What about First Amendment rights - “Walmartsucks.com” - would the results have been different in another forum? Should consumers be able to register ‘sucks’ sites?

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Trademark Disputes

Case discussion Electronics Boutique v. Zuccarini - Cybersquatter made a

significant profit from affiliate advertisements on his site. Court awarded landmark damages.

Zuccarini later landed in jail.– S.151 – Child Abduction Prevention Act - outlaws misleading domain

names

College Source Case Discussion

Keywords and the likelihood of confusion

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Search Engine Keywords

Can Google auction ‘Rosetta Stone’ trademarks as keywords?

– Rosetta Stone Ltd. v. Google Inc. (Case No. 09cv736, E.D. Va., 8/3/10)

Google keyword program: https://adwords.google.com/select/KeywordToolExternal

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Trademarks: Registration

No registration is required but….– Federal registration allows you exclusive

nationwide use of a name within a product class.– State registration provides additional causes of

action against infringers.– Registration provides notice to anyone trying to

use the name in the same product class.– For info on registering domain names as TMs -

www.uspto.gov/web/offices/tac/notices/guide299.htm.

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Patent - Scope“Any new and useful process, machine, manufacture, or

composition of matter, or any new and useful improvement thereof” 35 U.S.C. § 101

Articles of Manufacture

Machines Compositions of

Matter Processes

Ideas Scientific Principals Methods of doing

business Natural Substances

Types of work protected: Not protected:

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Patentable subject matter Novelty Utility Non-obviousness Lots of capital

Requirements for a valid patent

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U.S. average: >$10,000– 97% of patents generate less revenue than

the cost of filing the patent. Japan: $14,000 European Union (8 states): $44,000

– 25% of the cost is for translation fees.

(Costs include legal fees)

Filing Patents Can Be Expensive

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Early cases held that an algorithm is like a law of nature, which cannot be the subject of a patent.

Later cases recognized patents which contained algorithms. The State Street algorithm case opened the flood gates for Internet

related patents by raising awareness and affirming their validity. Bilski gutted most of State Street in 2010, but left the door open

for the registration of intangible technology beyond the ‘machine or transformation’ test.

– “Software, advanced diagnostic medicine techniques, and inventions based on linear programming, data compression, and the manipulation of digital signals.”

– Must not be too abstract.

Computer related patents are relatively new

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Internet related patents went from 433 in 1997 to 3,512 in 1999 and over 5,000 in 2000. Some of the obscure patents occasionally threaten to impact online activities.

IBM earned more than $2 billion in patent licensing in 2012.

The pace of registration may have slowed with fewer companies playing in the same arena.

Companies were on patent registration frenzy

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“Method and apparatus for a cryptographically assisted commercial network system designed to facilitate buyer-driven conditional purchase offers.”

In other words: Priceline.com’s business model for reverse auctions.

Is this novel or non-obvious?

Patent # 5,794,207

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“Information handling system and terminal apparatus therefor. A central computer means in which plural blocks of information are stored at respectively corresponding locations, each of which locations is designated by a predetermined address therein by means of which a block can be selected.”

British Telecom v. Prodigy – hyperlinking. Dismissed.

Other patents claimed to threatened the Internet as we know it (4,873,662 -

1989)

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One click shopping (Amazon) Reverse auctions (Price Line) Online music sales (Sight Sound) Internet coupons (Cool Savings) Online auctions (E-bay) Video downloading (adult & other sites) What other patents are dormant but could

disrupt e-commerce?

Online Patent Disputes

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Patent owner who enforces patent rights but doesn’t actually manufacture the patented product (or service).

Some emerged by buying patents during the dot com bust.

Often send an offer for a nuisance level license fee.

Threat of injunction pushed settlement.

Patent Trolls

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Supreme Court Reiterated Injunction Standard for Patent Infringement

Plaintiff must demonstrate:

– It has suffered irreparable injury;

– Remedies at law are inadequate;

– The balance of the hardships weigh in favor of permanent injunction;

– Public interest would not be disserved by permanent injunction.

eBay vs. MercExchange

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Online Patents: Next Steps

Technology patent parameters are still evolving.– eBay case gave some justices a forum to complain.

Be aware of patent issues when advising clients to help them:– avoid infringement– protect a novel, unique process

Patent suits can cost millions to defend – even for a weak claim.

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Questions & Answers