Intellectual Property on
the Web
Trademark, Copyright and Patent Issues
That Impact All Companies in the
Internet Age
The material provided herein is for informational purposes
only and is not intended as legal advice or counsel.
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Trademark and Copyright
Issues on the Web
Jeanne Hamburg
Why Important?
• Top IP concerns:
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Cybersquatting
Unlawful copying of digital media content
Reverse engineering
Phishing
Sale of counterfeit goods online
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Overview
• Transactional Issues:
– Licensing Web Content
– Web Publishing
– Web Site Development
• Counseling Issues
– Web Content Clearance/Fair Use
• Contentious Issues
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Domain name recovery (cybersquatting)
DMCA
Litigation of online copyright infringement and licensing cases
Copyright and trademark issues arising from phishing, online
counterfeiting, key word purchases, hyperlinking, pop up ads,
framing
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Licensing Web Content
• Distinguish whether content is being
licensed or just a trademark
• Is the content copyrightable?
• What type of use is contemplated? (May
not require a license)
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Licensing Web Content
• What kind of license?
• What type of grant?
• Representations and Warranties
• Credit, right of attribution, right of
publicity
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Web Publishing
• Publish and/or
purchase a book that
is printed and
shipped to you or to
download a digital
copy
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Web Publishing
• Form of license, same issues
• Technological safeguards on unauthorized
copying
• Does third party site have terms of use
prohibiting unauthorized use of digital
content purchased?
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Web Site Development
• Hiring of third party (independent
contractor) to develop site
• Who will own content created and the
html code used to create it?
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Web Content Clearance: Fair Use
• You are a site owner or third party owning
content appearing on third party site without
permission
• Cannot assume creative content (graphic,
textual, sound recordings, etc.) are not
protected by copyright simply because
available on web
• Sites claim to make material available that is
in “the public domain” (copyright has
expired) but may not be
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Web Content Clearance
• If license content from such a site, look for
representations and warranties that site
owner has the rights
• Look for terms of use that may restrict use
of the licensed content; often a one time
“click through”
• Right of publicity/privacy issues if person
is depicted in connection with promoting
a business
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Web Content Clearance: Fair Use
• “Fair use” codified at 17 U.S.C. 107
• Allows the user of copyrighted material to do things
otherwise exclusively the right of the copyright owner—
so permission not required
• Must be for “fair use” purposes enumerated by statute:
e.g., criticism, comment, news reporting, teaching,
scholarship, research
• Four factor test for “fair use”: (1) purpose and character
of use; (2) nature of work; (3) amount and substantiality
of portion used; (4) effect on marketplace value
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Contentious Issues
• Cybersquatting
• DMCA
• Litigation of online copyright/licensing
cases
• Trademark and copyright issues unique
to the web
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Cybersquatting
• Trademark, or confusingly similar
mark, is used in a web site address
• Prohibited by federal law
• Vehicles for domain name recovery
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Federal Court Action for
Cybersquatting
• Rarely done unless there is
also another act of trademark
infringement
• Expensive
• No showing of bad faith
required
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UDRP Proceedings
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Arbitration proceeding
Not necessary to own registered mark
Confusingly similar
No legitimate right to the domain name
Registered in bad faith
ICANN
WIPO in Switzerland and NAF in Minneapolis
Complaint, Reply, and Surreply, then a single
member or three member panel will decide. All
filed electronically.
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DMCA: Service Provider Liability
• DMCA effective weapon for those whose
copyrights are infringed on the web
• Makes the host of content, who receives
notice of the infringement from the
copyright owner or its counsel, liable if it
does not take down the content
• Fantastic remedy when infringer’s identity
is not known or infringer is uncooperative
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ISPs Frequently Contacted
Under DMCA
• Apple (iTunes, TETRIS infringements)
• Google
– Gadgets
– Android
• Amazon
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DMCA: Anti-circumvention
• Makes it unlawful for someone to hack
through technology designed to protect
the unauthorized exploitation of
copyrightable content
• Applies only if the content to which
unauthorized use is being blocked is
copyrightable (e.g. circumvention of
access to alphabetical directory listing
would not violate DMCA)
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Litigating Online Copyright
Infringement Cases
• Copyrightable expression (factual data
organized logically not protected)
• Access to copyrightable work (can often be
demonstrated with IP addresses)
• Copying
– Copying is presumed from substantial similarity—
the key test for infringement
• Fair Use
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Litigating Online Copyright
Infringement Cases
• Must obtain registration before you sue;
expedited registration may be secured for this
purpose (10 days vs. several months)
• Preliminary injunction often ends the case
• Declaratory judgment is popular for the alleged
infringer
• Must bring suit in federal court
• Often choice of jurisdiction
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Litigating Online Copyright
Infringement Cases: Licenses
• “Click through” agreements or “terms of use”
can raise special issues
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Important to attend to the terms
Consent to jurisdiction
Restricts use of content that is not copyrightable
Adhesion: courts generally find these agreements
binding
– Authority to bind company
– Hospital sued by provider of health care ratings
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Phishing
• Criminally fraudulent process of attempting to acquire
sensitive information such as usernames, passwords and
credit card details by masquerading as a trustworthy
entity in an electronic communication
• Communications purporting to be from popular social
web sites, auction sites, online payment processors or IT
administrators are commonly used to lure the
unsuspecting public
• Typically carried out by email or IM, and it often directs
users to enter details at a fake website whose look and
feel are almost identical to the legitimate one. Even when
using it may require tremendous skill to detect that the
website is fake
• MasterCard/UDRP recovery and investigation
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Legislation on Phishing
• No legislation directly prohibits, but there may be copyright
and trademark remedies available since site content and
trademarks are copied
• Credit Card Fraud Act
• The Identity Theft and Assumption Deterrence Act
• Fair and Accurate Credit Transaction Act
• California's Anti-Phishing Law
California in 2005 became the first state to enact legislation
designed specifically to deter phishing. Some victims of
phishing, including those who provide Internet access service to
the public, own a Web page, or own a trademark, may recover
up to $500,000 for each proven violation of the statute. Other
victims may recover up to $5000 for each violation of the statute.
The statute also allows the state's attorney general or a district
attorney in the state to bring an action to enjoin further
violations.
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Online Counterfeiting
• Best Practices for Trademark Owners
– Educate the public so they are not deceived on
online searches, marketplace and shopping sites
– Request that Payment Service Providers (such as
credit card and debit card companies, PayPal)
terminate service and indemnify PSP for wrongful
termination
– Report abuses of PSP’s trademark if trademark
owners are unable to make a purchase on a site
bearing the PSP’s mark
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Online Counterfeiting
• Contact the providers of Internet shopping
services under the DMCA or Lanham Act
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NGC trade dress of coin holders (ebay form)
eBay, Inc.
Yahoo
Google
Amazon
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Is Copying of Hyperlinks a
Copyright Infringement?
– In the DeCSS case Universal v. Reimerdes, 2600
Magazine prohibited from posting hyperlinks to
DeCSS code because it found the magazine had
linked for the purpose of disseminating a
circumvention device
– Intellectual Reserve v. Utah Lighthouse Ministry:
linking to unauthorized copies of a text might be a
contributory infringement of the work's copyright
– Ticketmaster v. Tickets.com found that hyperlinks
to ticket broker sites copied by tickets.com from the
ticketmaster web site were not infringements of
copyright
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Hyperlinking Best Practices
• In an email, do not provide a “live”
hyperlink
• Beneath a hyperlink in a site, include a
disclaimer that the site owner is not
affiliated with, does not endorse or
sponsor the trademark owner’s services
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Framing
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Framing
• Perfect 10 v. Amazon.com: Google's inline links were not infringements of the
copyright owner's rights to copy and
display its work.
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Pop Up Ads
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Pop Up Ads
• Are a site owner’s copyrights or
trademarks infringed when a competitor’s
pop up ad is displayed when a consumer
access the site?
• Most courts hold no when:
– No “use in commerce” of the site owner’s
trademark in the ad itself
– Not a derivative work
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Key Word Purchases
• Search engines such as Google sell third
party trademarks as “key words” which
will display the purchaser’s web site on
a search by the user for the key
word/trademark
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Key Word Purchases
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Key Word Purchases
• US courts split on whether this is
unlawful
– Is there likelihood of confusion, trading off
on goodwill earned by the trademark
owner or is this just like a virtual
marketplace where different branded
goods are displayed on virtual “store
shelves” next to each other?
• Issue may be treated differently abroad
and in US
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Pay Per View/Pay Per Click
Advertising
• What is PPV/PCC?
• Is the PPV or PPC ad of a third party (not
the trademark owner) an infringement if
it does not use the trademark in the ad
but is displayed on key word search of
trademark?
• In 2006 Yahoo prohibited PPV or PPC
advertisers from bidding on third party
trademarks
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Pay Per View/Pay Per Click
Advertising
• Google's AdSense program still
permits this; 95 percent of Google's
revenue comes from AdSense.
• What are “fraudulent clicks”?
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Questions & Answers
Session Part 1
Seminar Intermission
Business Method Patents and
the Bilski Case
Chris Casieri
What is a Patent?
• Exclusive rights granted to an inventor
for a limited period of time in exchange
for a public disclosure of the invention
• Rights extend for 20 years from earliest
filing date or 17 years from date of
issuance depending when the
application was filed
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What is the Origin of U.S.
Patent Law?
• Article I, Section 8, Clause 8 of the
United States Constitution
empowers the U.S. Congress:
– “To promote the Progress of Science and
useful Arts, by securing for limited Times
to Authors and Inventors the exclusive
Right to their respective Writings and
Discoveries.”
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What are the Types of U.S.
Patents Available?
• Utility Patents – Bilski’s application
• Design Patents
• Plant Patents
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What Types of Subject Matter are
Protectable by a Utility Patent?
• Section 101 of US Patent law sets out:
“Whoever invents or discovers any new and useful
process, machine, manufacture, or composition of
matter, or any new and useful improvement
thereof, may obtain a patent therefore, subject to
the conditions and requirements of this title.”
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What is a Business Method
Patent?
• Business method patent is a type of
utility patent which is directed to new
methods of doing or conducting
business
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Famous Business Method
Patent and Industries
• Amazon’s one-click buying patent used for
purchasing on Amazon.com
• Business method patents are useful to the
following industries:
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E-commerce
Insurance
Investment
Banking
Tax Compliance
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What Are Patent Claims?
• Patent claims define, in legal patent
terms, the extent of the protection
sought in a utility application
• A sample patent claim may read:
– "Method for computing future life
expectancies, said method comprising
steps X, Y, Z, ..."
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What is the Bilski Case and
What is its History?
• The Bilski’s patent application is a pure
business method patent application
which has raised questions about what
types of inventions may be too abstract
to qualify for US patent protection
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In general, Bilski’s main
claim requires the steps of:
• Initiating a series of transactions between a broker
and purchaser by which the purchaser may buy a
commodity at a first fixed rate based on historical
price levels
• Identifying a producer of the commodity
• Initiating a series of transactions between the broker
and producer, at a second fixed rate, such that risk
positions balance out
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Legal History of Bilski
• US Patent Examiner rejected all claims
• USPTO’s Board of Patent Appeals and Interferences
affirmed the Examiner’s decision
• Court of Appeals for the Federal Circuit (CAFC)
affirmed the USPTO’s rejection of all claims
• Bilski appealed to the US Supreme Court for review
the CAFC’s decision
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Why is Bilski Important?
• CAFC’s decision was extraordinarily
over broad
• As a result, software, pure business
methods, medical diagnostic methods,
biotechnology methods, medical device
and e-commerce patents may be
unpatentable/invalid in view of the
CAFC’s decision
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What Test was Adopted by the CAFC
and What was Their Decision?
• CAFC applied a particular machine or
transformation (MOT) test:
– A claimed process is surely patent-eligible under §
101 if: (1) it is tied to a particular machine or
apparatus, or (2) it transforms a particular article
into a different state or thing
– In other words, transformation/reduction of an
article 'to a different state or thing' is the clue to
the patentability of a process claim that does not
include a particular machine
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Additionally Issues That Further
Narrowed the CAFC’s Decision Include:
• Mere field-of-use limitations are generally
insufficient to render an otherwise ineligible
process claim patent-eligible
• Insignificant post-solution activity will not
transform an unpatentable principle into a
patentable process
• Methods of organizing human activity are not
patent-eligible under US patent law
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What is the Historical Standpoint
Taken by the Supreme Court?
• The Supreme Court typically allows
inventions that incorporate or apply
abstract concepts such as mathematical
formulas, as long as the invention, as
claimed, has a sufficiently practical
impact in the real world.
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What Alternatives are There to the
MOT Test Adopted by the CAFC?
• In the 1998, the CAFC utilized the
straightforward concrete, useful,
tangible test (the CUT test)
• CAFC effectively overruled the CUT
test with their Bilski decision
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What are the Issues Before
the Supreme Court?
Key question to be considered by the
Supreme Court:
• Whether the MOT test should command
patentability outcomes possibly not intended
by Congress or required under the plain
language of the statute
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How May the Supreme Court
Decide?
• The Supreme Court may:
– Affirm the MOT test, but rule that it is not the
definitive test for determining patent eligibility
– Rule that business methods are inherently abstract
ideas and are not patentable
– Affirm the CAFC’s decision, making the MOT test
the bright-line test for establishing patentability
under 35 USC 101
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How Should Software/Business
Methods be Protected Until the
Supreme Court’s Decision?
• Software and business methods should still
be protected with patents
• Patent claims should be included that satisfy
the narrow MOT test
• Patent claims satisfying the broader CUT test
should also be included
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Claim Satisfying the MOT test
• A method comprising:
– Providing a computer network having a
programmed computer and a VOIP device
– Initiating a first sales transaction between two
parties over the computer network via the
VOIP device
– Identifying a producer with the programmed
computer over the computer network
– Initiating a second sales transaction between
the producer and a party over the computer
network via the VOIP device
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Claim Satisfying the CUT Test
• A method comprising:
– Initiating a first sales transaction between two
parties
– Identifying a producer
– Initiating a second sales transaction between
the producer and a party
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Questions & Answers
Session Part 2
Thank you for coming!