Spring 2007
Internet & Intellectual
Property Law Update
Jacqueline A. Criswell, Editor
Viacom Seeks
$1 Billion
In Damages
From Google
For Willful
Copyright
Infringement
Page 4
First “Touch” Mark Is Granted
Trademark Protection
Page 2
Newark New York Chicago Bolingbrook Wheaton Los Angeles Orange County
Second Circuit To Decide Whether Trademarks Can Be
Used In Keyword Searches
Last year, a New York Federal Court dismissed Rescuecom’s Complaint that Google infringed
its trademark by selling keyword triggered advertisements to its competitors under the
AdWords program. Rescuecom provides computer consulting and networking services.
When consumers entered the search term “Rescuecom” in Google’s search engine, they
received search results that included competitors’ ads among the “sponsored” listings.
However, the ads did not include the word “Rescuecom” in their text. Rescuecom contends that the intentional proximity
of competitors’ links implies an association with Rescuecom. The court granted Google’s motion to dismiss because
Rescuecom could not establish that Google made “trademark use” of its mark since the term never appeared in the text
of the competitors’ ads and Google’s use was entirely internal.
The Second Circuit Court of Appeals will decide whether a search engine’s practice of allowing advertisers to key their
ads to trademarks of others constitutes trademark use for purposes of a trademark infringement claim. Google argues
that the sale of a trademark in the AdWords program is similar to a competitor purchasing adjacent shelve space or a
magazine ad near a competitor’s ad. Rescuecom contends that search engine results are more analogous to directory
assistance and when a customer asks for a particular item, it expects the response to answer the question. While several
district courts have ruled on this issue, the decisions are split and no appeals court has yet addressed it.
The lower court ruling can be found at Rescuecom Corp. v. Google, Inc., 456 F.Supp.2d 393 (N.D. N.Y. 2006).
First “Touch” Mark Is Granted Trademark
Protection
American Wholesale Wine & Spirits applied for federal trademark registration for the velvet textured
covering of its wine bottle. The Patent & Trademark Office (PTO) initially rejected the application on the
ground that it was not distinctive. American argued that the velvety feeling of its wine bottle covering had
no utilitarian function. Its purpose is to distinguish it from other wine bottles, which lack a similar feel and
to indicate the source of the wine. It explained that its covering was different from the bag surrounding a
bottle of Crown Royal whiskey since the Crown Royal bag is not attached to the bottle and is very different
from the feel of American’s tightly encased velvety bottle. The PTO was persuaded and granted registration
to this first sensory touch mark!
Wayback Machine Printouts Held Inadmissible
Internet Archive provides a service through its “Wayback
Machine” that allows consumers to print out web pages
as they supposedly appeared on a prior date. A New
York Federal Court held that Internet Archive exhibits
were inadmissible because they were not supported
by personal knowledge that the websites are what they
purport to be. One problem is that the material provided
by the Wayback Machine is created by web spiders that
automatically collect data from third-party web pages.
Thus, it is only as valid as the third party donating the
page decides to make it. The authorized owners and
managers of the archived websites play no role in
ensuring that the material posted is accurate. The exhibits could be admissible if they are accompanied by testimony or
sworn statements from the operator of the third party website attesting to the authenticity of the contested web pages.
Petswarehouse.com v. Tucows, Inc., 2007 WL 922306 (E.D. N.Y.).
Page 2
A Quiz For You
Can you recall which products are associated with the following advertising slogans?
1.
Image Is Everything
2.
Live In Your World, Play In Ours
3.
Expect More, Pay Less
4.
It Helps The Hurt Stop Hurting
5.
I Love What You Do For Me
6.
When It Rains, It Pours
7.
Something Special In The Air
8.
Look Ma, No Cavities
9.
Everything You Want, Nothing You Don’t
10.
A Great Weekend In Every Box
11.
Nothing Comes Closer to Home
Answers are listed at the end of this Update.
“Pull My Finger Fred” Blows Away Competitor
In 1999, Tekky Toys began selling a plush doll called “Pull My Finger Fred,”
which makes a fart sound when squeezed. The President of Novelty, Inc., after
seeing “Fred” at a manufacturer’s showroom, decided to produce and market
its own doll, “Fartman.” However, Novelty’s doll was practically identical in
appearance to Tekky’s doll. Before Fartman went on sale in late 2001, Tekky
registered its copyright on Fred. Shortly after learning of Fartman’s existence
in 2002, Tekky sued for copyright infringement, trademark infringement,
and unfair competition. Soon thereafter, the court enjoined all further sales
of Fartman. At trial, a jury awarded Tekky $116,000 for lost profits due to
copyright infringement, $125,000 for trademark infringement and $50,000
in punitive damages based on Illinois unfair competition laws. The court also
awarded Tekky $575,000 in attorneys’ fees.
On appeal, Novelty contended that much of what the trial court had protected
Pull My Finger Fred
was scenes a faire, unprotected standard characters or settings. It argued that
it merely made a similar doll based on the same comic archetype, that of “a
typical man wearing jeans and T-shirt in a chair doing the ‘pull my finger’ joke.” The Seventh Circuit explained that it is
not the idea of a farting, crude man that is protected, but this particular embodiment of that concept, which is sufficiently
creative to be afforded copyright protection. Novelty’s problem was that it copied Fred’s features so closely that the court
said that Fartman could be Fred’s twin. With respect to the attorney fee award, Novelty argued that it was excessive
because it was significantly more than Tekky’s attorneys could recover under their contingency fee agreement. The Court
rejected the argument that attorney fee awards are limited to the amount provided by a contingency agreement, noting
that there is a strong presumption that the traditional lodestar approach should be used. Novelty itself had increased
Tekky’s legal fees by unreasonably contesting every issue and prolonging the litigation unnecessarily.
JCW Investments, Inc. v. Novelty, Inc., 2007 WL 817673 (7th Cir., 2007).
Page 3
Removal Of Colbert Report Satire From YouTube Is
Challenged On First Amendment Grounds
A video entitled “Stop the Falsiness” is a tongue and cheek commentary
on Colbert’s portrayal of the right-wing media. It was uploaded to YouTube
and included clips from “The Colbert Report,” as well as interviews about
host Stephen Colbert. In March, 2007, Viacom, the parent company of
Comedy Central, demanded that YouTube remove the video, claiming
copyright infringement. The removal of the short film from YouTube is
being challenged by the Electronic Frontier Foundation (EFF) on the basis
that it constitutes an act of free speech and fair use of “The Colbert
Report” clip.
Under the Digital Millennium Copyright Act (DMCA), even an allegation
of copyright infringement on the Internet can result in content removal
before any misuse is proven. This results in a chilling effect for online
artists and critics.
Viacom Seeks $1 Billion In Damages From Google
For Willful Copyright Infringement
Viacom International, parent of MTV and Comedy Central, has sued YouTube
and its owner Google, Inc. for using the leverage of the Internet to appropriate
creative content on a massive scale without payment or license. YouTube
purports to be a forum for users to share their own “user generated” video
content. Viacom contends that more than 150,000 unauthorized clips of
its movies or TV shows, such as “SpongeBob SquarePants,” “South Park”
and “The Daily Show with Jon Stewart,” are posted every day on YouTube.
It asserts that “YouTube’s brazen disregard of intellectual property law
fundamentally threatens not just Plaintiffs, but the economic underpinnings
of one of the most important sectors of the United States economy.”
A key issue to be decided in
this lawsuit is the scope of
the safe harbor clause in the
Digital Millennium Copyright
Act (DMCA), which protects web
hosting services from liability
under certain conditions. Viacom alleges that YouTube goes beyond hosting
users’ websites but actually exercises control over them. It claims that
YouTube intentionally built up a library of infringing works to draw traffic to its
site, which enabled it to gain significant market share. YouTube knowingly
reproduces and publicly performs the copyrighted works uploaded to its
site. The Complaint seeks a declaration that YouTube and Google willfully
infringed plaintiffs’ copyrights, a permanent injunction requiring them to
prevent or limit infringement and statutory damages for past and present
willful infringement or actual damages plus profits of at least $1 billion.
Viacom International, Inc., et al. v. YouTube, Inc., et al., (S.D. N.Y. 2007).
Page 4
Distribution Of Photo That Digitally Cropped Out
Copyright Notice May Violate The DMCA
Plaintiff McClatchey lives in Pennsylvania and saw the crash of United Flight
93 on 9/11. She took a photograph of the mushroom cloud set against a blue
sky, which subsequently received copyright protection and has been displayed
at the Smithsonian Institute. In 2002, at a ceremony commemorating the
9/11 tragedy, an Associated Press reporter suggested writing a story on the
photo and McClatchey. While at her home, the AP photographer took a picture
of the copyrighted photo. McClatchey alleged that AP cropped out the title
“End of Serenity” from the photo and the copyright notice and distributed it
to thousands of member news organizations without her permission. She
learned that her photo was being used on AOL’s homepage in connection with
a Flight 93 conspiracy theory and also that it had been used without approval
by the Washington Post and the Philadelphia Daily News, via AP. The Complaint
contains claims for direct, contributory and vicarious copyright infringement and for removing and distributing false
copyright information, in violation of the Digital Millennium Copyright Act (DMCA).
The AP filed a motion for summary judgment, arguing that the photo did not qualify for protection under the DMCA and
that its use was permissible under the fair use doctrine. The court denied AP’s motion for summary judgment, finding
that there was insufficient evidence that the fair use doctrine would apply. While the photograph depicts a news-worthy
event, the event was no longer timely and had been extensively chronicled. Thus, there was arguably no significant
newsworthiness in distributing the photo a year later. The court also held that the DMCA applies to the facts of this case
and that there are disputes of fact as to whether the photographer removed the copyright notice, which cannot be decided
on summary judgment. When viewed in the light most favorable to plaintiff, the record could support claims for direct
and secondary infringement and for violations of the DMCA. There is also factual support that a reasonable juror could
conclude that the AP acted willfully.
McClatchey v. The Associated Press, 82 U.S.P.Q.2d 1190 (W.D. Pa. 2007).
Seventh Circuit Holds That Registered Trademark
“Work-N-Play” Is Not Entitled To Protection
Plaintiff Custom Vehicle (Custom) created a product called “Work-N-Play” – a van,
the interior of which could be converted from a mobile office to a camper so the
owner could work out of it through the week and play out of it on the weekends.
Custom obtained a federal trademark registration for the term. Defendant Forest
River sold a towed van with a ramp door at the back and space inside for a repair
shop so that the van’s owner could both transport his motorcycle or snowmobile
and repair it without taking it to a repair shop. It called its new product “Work and
Play.” Both parties market their products at RV trade shows.
Custom sued defendant for infringement of its registered trademark.
However, the Seventh Circuit affirmed the trial court’s finding that
the term Work-N-Play is a descriptive mark which merely describes
the product category to which the brand belongs (like “All Bran” and
“Holiday Inn”). Descriptive marks cannot be registered since they
would make it difficult for competitors to describe their products.
However, a term that originally was descriptive may come to signify
to consumers a single brand. As an example, “All Bran” came to
mean not any bran cereal but a particular brand. Once this happens,
the trademark acquires secondary meaning and is protectable. The court concluded that the term Work-N-Play is not a
protectable trademark because it never became associated in consumers’ minds with Custom’s vans.
Custom Vehicles, Inc. v. Forest River, Inc., 476 F.3d 481 (7th Cir. 2007).
Page 5
Financial Service Providers Are Targets of
Phishing Attacks
Major banks such as SunTrust, MBNA, Wells Fargo, Bank One and
Bank of America are increasingly targeted as victims of phishing
attacks. A phish thief entices consumers to visit fake websites,
where they provide important personal information, leading to
identity theft. These techniques include:
• Phishing
Phishers try to obtain personal information, consumer email passwords or bank account passwords by pretending to
be from a valid source, such as the consumer’s bank.
• Spear Phishing
Bank of America
Jane Smith
Verify Your Password
This is a method in which authentic looking e-mails are sent
to members of a particular government agency, organization or company. The reader believes it is coming from an
employer or colleague.
• Vishing
Vishing thieves obtain credit card information illegally using Voice Over Internet Protocol (VoIP). Vishers use simple
software programs to set up an authentic sounding automatic customer service line, such as one for a bank.
According to recent research, up to 24% of consumers say they limit their online banking transactions due to these
fraudulent schemes.
Microsoft Sues Firm For “Domain Tasting”
Microsoft recently filed a Complaint in California Federal Court against a firm that it alleges
operates more than 400 Internet domain names that infringe on Microsoft’s trademark. Microsoft
calls defendant “a large scale domain taster” that takes advantage of the five day grace period
offered by the Internet Corporation for Assigned Names and Numbers (ICANN) for domain name
registrations. Defendant registers large blocks of domain names with ICANN and tests them for
market viability during these five days, retaining those domains that it believes will be profitable.
Defendant registered domain names that incorporate one of Microsoft’s marks or a misspelling
of one of the marks. As a result, a consumer who incorrectly enters a domain name, such as
powerppoint.com, arrives at a website owned by defendant instead of Microsoft. Microsoft claims that the domains exist
for the sole purpose of diverting customers to defendant’s sites and ultimately, to its advertisers’ sites. The Complaint
contains counts for violation of the Anti-Cybersquatting Consumer Protection Act (ACPA), trademark infringement, false
designation of origin and unfair competition under the Lanham Act.
Microsoft Corp. v. Maltuzzi, LLC., (N.D. Cal.)
Page 6
Domain Name Spying
Entities are tracking your search for a potential domain name and registering it
first in an attempt to profit. New techniques include:
• Domain Name Spying
An individual or entity purchases a domain name only after covertly
determining that someone has checked the name’s availability.
• Domain Name Tasting
This involves short-term registration of a number of domain names. The
grace period allows a registrant to obtain a refund of a domain name
registration fee by returning the name within 5 days of registration. A taster may do this to generate advertising
income and determine the profitability of paying for long-term ownership of the domain name.
• Domain Kiting
The registrant returns domain names at the end of the 5 day grace period but then quickly reacquires the names in
order to maintain long term ownership and avoid paying ownership fees.
Victims of domain name spying can make use of trademark and cybersquatting laws to protect their marks if they own a
trademark registration.
Insurance Agents Enjoined From Stealing Trade Secrets
Of Former Employer
The defendants are insurance agents who were terminated by American Family Mutual Insurance Co. and then began
soliciting its customers. American Family sued defendants for breaching their agency agreement and stealing trade secrets. The agency contract required agents to submit all new business through the company database and the agents had
access only to the information in the database that concerned the customers they served. The agents also had compiled
their own customer list, which they used as a source of names for customer solicitations they conducted after being terminated. The vast majority of these names were also in plaintiff’s database.
The Seventh Circuit explained that once the agents entered customer information into plaintiff’s database, it became
plaintiff’s trade secret. It found that the customer information in plaintiff’s database qualifies as a trade secret since it
was not generally known or readily ascertainable and plaintiff took reasonable efforts to maintain its secrecy. The Court
affirmed the basis for the injunction but found it over broad and remanded it for re-drafting.
American Family Mutual Insurance Co. v. Roth, et al., (7th Cir., May 7, 2007).
Utah Is First State To Prohibit Competitors From Using
Others’ Trademarks In Keyword Search
Utah’s governor recently signed into law a bill that prohibits entities from using a registered electronic mark to cause “the
delivery or display” of an advertisement if the ad is likely to “cause confusion” between the business, good or service of
the registered mark and the one being advertised. Utah’s law is one of the first attempts to address keyword advertising’s
use of other companies’ trademarks through registration. The current practices of search engines and pop-up advertisers
allow competitors to inexpensively capitalize on the goodwill of a brand in order to promote themselves. The Utah law
requires search engines to check a database of registered trademarks to avoid displaying ads triggered by a keyword
search for a term that is a registered electronic mark. The law is enforceable through civil lawsuits.
The law has received substantial criticism and appears to cover anyone selling keyword ads, including major search
engines like Google and other e-commerce sites like Amazon and eBay. It is likely that the law will be attacked as
unconstitutional.
http://le.utah.gov/-2007/bills/sbillenr/sb0236.htm
Page 7
Computer Part Number Descriptions Not
Entitled To Protection
Plaintiff Windgate Software markets a database
containing physical descriptions of parts and equipment
employed in computer platforms. The database
assists users in identifying replacement parts for IBM
computers. Defendant’s employee located plaintiff’s
website and signed up for a demo account, falsely
identifying himself, and took part numbers, part names
and part descriptions and keyed them into defendant’s
database. Windgate sued for copyright infringement.
The Minnesota Federal Court ruled that Windgate had
not demonstrated a likelihood of success since the IBM
part numbers are not original to Windgate and are not
entitled to copyright protection since the numbers were
assigned by IBM and merely constitute facts.
Windgate Software, LLC v. Minnesota Computers, Inc.
(Dist. Ct. Minn. 2007).
Quiz Answers
1.
2.
3.
4.
5.
6.
Canon
Sony Playstation
Target
Bactine Antiseptic
Toyota
Morton Salt
7.
8.
9.
10.
11.
American Airlines
Crest Toothpaste
Nissan
Bisquick
Stouffer’s
Congratulations! You Did Great!
Tressler, Soderstrom, Maloney & Priess, LLP
OFFICE LOCATIONS
233 South Wacker Drive
Sears Tower, 22nd Floor
Chicago, IL 60606
312/627-4000
Fax 312/627-1717
If you have any questions concerning this bulletin or
TSM&P’s Intellectual Property Practice Group, please contact:
Jacqueline A. Criswell
James K. Borcia
312/627-4003 jcriswell@tsmp.com
312/627-4104 jborcia@tsmp.com
This advisory is for general information only and is not intended to provide, and should not be relied
on for, legal advice in any particular circumstance or fact situation. The reader is advised to consult
with an attorney to address any particular circumstance or fact situation. The opinions expressed in
this advisory, if any, are those of the authors and not necessarily of Tressler, Soderstrom, Maloney &
Priess, LLP or its clients.
305 West Briarcliff Road
P.O. Box 1158
Bolingbrook, IL 60440
630/759-0800
Fax 630/759-8504
744 Broad Street
Suite 1510
Newark, NJ 07102
973/848-2900
Fax 973/623-0405
3070 Bristol Street
Suite 450
Costa Mesa, CA 92626
714/429-2900
Fax 714/429-2901
14 Wall Street
22nd Floor
New York, NY 10005
212/971-6250
Fax 212/971-6263
1901 Avenue of the Stars
Suite 450
Los Angeles, CA 90067
310/203/4800
310/203-4850
2100 Manchester Road
Suite 950
Wheaton, IL 60187
630/668-2800
Fax 630/668-3003
Tressler, Soderstrom, Maloney & Priess, LLP, Copyright 2007