Advanced Technology
Seminar
IP Continued: Digital
Content, Trademarks &
Copyright
Cyrus Daftary & Todd Krieger
February 17, 2015
Agenda
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Administrative Discussion
Copyright and Technology (cont.)
Trademarks
Patents
Questions & Answers
2
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Online Content and Other
DMCA Technology Disputes
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
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3
Copyright Related Technology Disputes
• Copyright issues often emerge with the
introduction of new audio recording/playing
devices.
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–
–
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VCRs (‘time shifting’).
Digital audio tape.
MP3 players (‘space shifting’).
Home CD and DVD duplicators.
• The RIAA and MPAA have pursued contributory
infringers (sites) and individual users.
4
Space Shifting Case Discussion
• Whether Aereo “perform[s] publicly,” under
Sections 101 and 106 of the Copyright Act by
supplying remote equipment allowing a
consumer to tune an individual, remotelylocated antenna to a publicly accessible, overthe-air broadcast television signal, use a
remote digital video recorder to make a
personal recording from that signal, and then
watch that recording.
5
May I Borrow and Image from a
Twitter Posting?
• Eli and Jason found some great images
online to use for their app. Can they use
them?
• Agence France-Press discussion.
6
Online Music Introduction
The Internet has Changed Content
Distribution
• While Napster was still in business over 3 million
unauthorized MP3 files were downloaded daily (M2
Presswire November 21, 2000).
• Apple sold billions of iTunes and Apps in 2014.
• Many artists post songs from pending CDs online.
• Local and unsigned bands can distribute their music
worldwide.
• CD unit sales have dramatically declined (RIAA).
• Amazon MP3 now offers DRM free downloads for .89-.99
each from all four major labels.
•
http://phx.corporate-ir.net/phoenix.zhtml?c=176060&p=irol-newsArticle&ID=1095117&highlight=
7
Music Theft is Still Common
8
Evolution of Online Music Cases
MP3.com
Napster
KaZaA,
Grockster
Host
End Users
End Users
Napster Database FasTrack supernode Network
ISP
ISP
ISP
Directory Software
End User
End User
End User
9
Bit Torrent Facilitates Partial
File Transfer from Multiple Users
End User
10
Listeners Have Many Choices
• Computers and mobile devices now act as virtual
jukeboxes.
• Favorite tracks can be swapped with friends.
• Virtual music communities help with profiling
and sampling of music.
• Computer speakers or earbuds are adequate for
desktop and portable listening.
• Technology allows consumers to take all of their
music with them - everywhere.
11
What is Digital Technology Anyway?
• Like analog, digital refers to a method of data encoding.
• Digital is a binary code - either 0 or 1.
• Analog music recording stores and transmits all
information - including redundant, inaudible, and
relatively insignificant sound.
• Digitally recorded or compressed music approximates the
actual sound by removing the redundant in imperceptible
data making files easy to compress.
12
Online Music Technology
• MPEG 3 = Motion Picture Expert Group-1, Audio 3.
• Open standard.
• Sound files are compressed by removing information not
likely to be noticed.
• Compression ratio = 10:1 (8.3%). (Minidisc = 5:1, Compact
Disc = 1:1).
• A five minute CD track would be 50 megabytes - with
compression = 5 megabytes.
• Download time reduced from two hours to a few minutes.
13
The Future of Digital Music
• (2001) “(CNN) -- The prospect of music lovers purchasing digital songs
on the Internet in the future looks extremely bleak, despite efforts by
the recording industry to convince them to do so, according to a new
report.”
–
http://archives.cnn.com/2001/TECH/internet/08/30/digital.music/index.html
• Portable devices are ubiquitous.
– Mobile phones have video-enabled displays.
• Stand alone devices can play Internet radio.
• As bandwidth and connection speeds increase, more
information can be transmitted. Memory capacity is
improving as well.
– 80 Gigabyte hard drive was $200 in 2003.
– 2 Terabytes drive is less than $100.
14
Additional Sources of Law
• 17 U.S.C. (1976) (fedlaw.gsa.gov).
• Audio Home Recording Act (1992) (17 U.S.C. 1001)
– Must conform to serial copy management system - Rio.
• Digital Performance Right in Sound Recordings Act (1995)
– Exclusive right in residential subscription digital audio
transmissions. 6.5% compulsory license rate.
• WIPO Treaty (1997)
– I.S.P. safe harbor.
• Digital Millennium Copyright Act (12/98) - copy protection.
15
Rio
• R.I.A.A. v. Diamond Multimedia
(1998)
– Audio Home Recording Act:
– Consumers can make copies of music they have purchased for
personal use:
• Analog copies on cassette tape;
• Digital copies on a compact disc recorder, digital audio tape recorder,
MP3, etc.
– Digital recording devices and media carry an additional royalty
to compensate for home recording.
– Computer hard drive is not a “digital music recording” because
objects in which one or more computer programs are fixed are
exempted from AHRA (1001(5)(B)(ii).
16
MP3.com Dispute
• MP3.com provides licensed MP3 files to
download for RIO and other MP3 players.
• MP3.com adds “Mymp3.com” allowing members
to log in and recreate their CD collections online for use anywhere.
• Members can ‘beam’ their CDs to MP3 for
verification.
• MP3 already has the music converted and on file.
17
Why Did MP3.com take the Legal
Risk?
• Strategic decision to force public negotiations/dialogue.
• Publicity: (Yahoo Financial News quoting thestreet.com)
– “[Mp3.com] offers songs no one wants through a technology it
doesn’t own. Its market: anyone bored enough to rummage
through the offerings of more than 30,000 artists in the hope of
finding the next Celine Dion.”
• Perhaps the unlikely chance of a sympathetic judge?
– Is the description of Mp3.com that different from: “YouTube is a
video dumpster for a disorganized bazaar of images.” Washington
Post July 25, 2006
• Settlement contract:
http://contracts.onecle.com/mp3/virgin.lic.2000.07.26.shtml
18
Webcasting
• Online radio stations have to follow the same rules as
terrestrial radio stations plus:
– Additional royalties to performers.
– Limits on advanced announcement of songs.
– Limits on number of songs from the same album and same artist
during a finite period of time.
– Those who comply have access to all public music.
• Not many webcasters have survived.
– Current webcasting information available at the Radio and
Internet Newsletter: http://www.kurthanson.com/
• Ever use Pandora?
19
Podcasting
• A podcast is an online audio or video file easily transferred to
another device.
• Popular podcasts are created by individuals and by radio stations.
• They may contain music, discussions (NPR), or other content.
• Use of music may require two licenses:
– Performance rights for the composer’s work.
– License to play the performer’s version of the work.
– Synchronization license required if images are shown with music.
• Statutory web casting royalty scheme not available.
• Additional licenses may be required for images & videos.
20
Trademarks
21
Client Theme Revisited
• Eli and Jason have developed an iPhone
case, the ‘Retro-Cozy Case Beta,’ which is a
surprising hit on Etsy.
• Following their success with the case, they
develop a nostalgic phone App.
• They use “Eli’s Cases” as their brand.
22
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
23
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))
25
Infringing Linkedin Profile
• Avepoint case discussion
26
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.
27
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.
28
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.
– Bing uses meta tags as part of its search result algorithm.
– 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’d)
• 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
30
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).
• 191059834290
• 221366130028
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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.
32
New Top Level Domains
• Thousands of new generic top level
domains on the way:
– .bike, .clothing, .guru, .holdings, .plumbing,
.singles, .ventures .camera, .equipment,
.estate, .gallery, .graphics, .lighting, and
.photography as of last week.
• Companies can apply for TLDs for $185,000
each.
• Google applied for 101 including .boo,
.cloud and .soy.
33
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
34
Domain Name Controversy
(cont’d)
35
Solution
• They acquire “Theclub.com.”
36
New Problem - Ever hear of Club
Magazine?
• Adult magazine “club” claims that the
public associates the term with their
magazine:
37
Why Are Domain Names So
Significant?
• No comprehensive directory of web addresses,
so consumers often guess the domain name.
• Over 100 million .com 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.
38
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.
39
Many Domain Names are Still
Valuable
• http://www.businessinsider.com/the-10-mostexpensive-domain-names-of-2012-2012-12
40
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.
41
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
42
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
43
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/
44
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.
45
Trademark Disputes
Cybersquatter goes to Jail
• Electronics Boutique v. Zuccarini - Cybersquatter made a
significant profit from affiliate advertisements on his site.
Court awarded landmark damages.
– S.151 – Child Abduction Prevention Act - outlaws misleading domain
names
46
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
47
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
48
.
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:



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Ideas
Scientific Principals
Methods of doing
business
Natural Substances
49
Requirements for a valid patent
•
•
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•
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Patentable subject matter
Novelty
Utility
Non-obviousness
Lots of capital
50
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)
51
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.
52
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 2014.
• The pace of registration may have slowed with
fewer companies playing in the same arena.
53
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?
54
Other Patents Claimed to Threaten
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.
55
Online Patent Disputes
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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?
56
Non-Practicing Entities
• 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.
57
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.
58
Are Electronic Medical Records
Patentable Subject Matter?
• Mymedicalrecords case discussion
• What is the Mayo Test?
• What is required to pass the second
part of the test?
• What was the Court’s decision?
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