Advanced Technology Seminar
-
Intellectual Property Online (Continued)
Cyrus Daftary & Todd Krieger
February 11, 2013
1
Agenda
Administrative Discussion
 Trademarks
 Patents
 Questions & Answers

2
Administrative Discussion
Group Selection
3
Trademarks
4
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
5
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
6
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))
7
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
Malted Barbie
dilution).



Parody and commentary is protected by 1st
Amendment (www.ballysucks.com).
Comparative advertising in encouraged in http://creativefreedomdefense.org/fc_1.htm
the U.S., but not worldwide.
Often restricted to category of goods and
services.
8
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/whois
http://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

12
Common Domain Name
Disputes:







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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.
13
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

14
Domain Name Controversy
(Cont.)
15
Solution

They acquire “Theclub.com.”
16
New Problem - Ever hear of Club
Magazine?

Adult magazine “club” claims that the
public associates the term with their
magazine:
17
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.
18
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.

19
Many Domain Names are Still
Valuable

http://www.businessinsider.com/the-10-mostexpensive-domain-names-of-2012-2012-12
20
Online Trademark Lawsuit Toolbox
Causes of Action:




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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.
21
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
22
Trademark Cyberpiracy Prevention
Anti-cybersquatting Consumer Protection Act
S. 1948 Intellectual Property and Communications Omnibus Reform Act of 1999

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
23
ICANN Dispute
Resolution 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/
24
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.
25
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
27
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.
30
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
Types of work protected:




Articles of
Manufacture
Machines
Compositions of
Matter
Processes
Not protected:




Ideas
Scientific Principals
Methods of doing
business
Natural Substances
31
Requirements for a valid patent
 Patentable
subject matter
 Novelty
 Utility
 Non-obviousness
 Lots
of capital
32
Filing Patents Can Be Expensive
 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)
33
Computer related patents are
relatively new




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.
34
Companies were on patent
registration frenzy



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.
35
Patent # 5,794,207
 “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?

36
Other patents claimed to threatened
the Internet as we know it (4,873,662 


1989)
“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.
37
Online Patent Disputes
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?

38
Patent Trolls



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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.
39
Supreme Court Reiterated Injunction
Standard for Patent Infringement
eBay vs. MercExchange

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.
40
Online Patents: Next Steps

Technology patent parameters are still evolving.
–

Be aware of patent issues when advising clients to
help them:
–
–

eBay case gave some justices a forum to complain.
avoid infringement
protect a novel, unique process
Patent suits can cost millions to defend – even for
a weak claim.
41
Questions & Answers
42