Jan 212008

What You Need To Know About Internet Law: Trademarks

registered trademark symbol
There was some interest expressed in following up with more from last week's podcast with Marty I. Eisenstein, senior partner with Brann Isaacson, a law firm specializing in direct marketing law.

Marty offered to share some presentations on web intellectual property law, specifically covering trademarks, copyrights, and jurisdiction.

Here's the part one of three in those presentations (pdf).

Powerpoint, Part 1 of 3: Internet Law: Trademarks

Many thanks, Marty and Kevin.

Powerpoint as text

(original pdf easier to read)

Kevin R. Haley, Esq.
Brann & Isaacson
184 Main Street
Lewiston, ME 04243
© Kevin R. Haley


Trademark Definition
A trademark is a designation used by a person to “identify and distinguish his or her goods…from those manufactured or sold by others to indicate the source of the goods, even if that source is unknown.”

Types of Trademarks
The Principal Functions
of a Trademark
Trademark Issues Unique to the Internet
Domain Names
A domain name is an
alpha numeric string of
characters that enables
web browsing software to find the
address of a particular web server.
Domain Name Levels
Domain names typically have two levels – the top level domain is generic – the well-known .com for example, as well as .org, .net, .edu, .gov, .biz, and a few others.

The second level – the portion before the “dot” – is the interesting part and presents opportunities for marketing, as well as potential IP issues.
Domain Name Disputes
By far, the most common type of trademark related Internet dispute involves so-called “cybersquatting” – loosely defined as the use of another party’s IP trademark in a second-level domain name in order to profit unfairly from that party’s good will.

What to Do?
Trademark Infringement: Likelihood of Confusion
Trademark Infringement theory works well only in limited instances because it requires proof of “likelihood of confusion.”
Likelihood of confusion generally focuses on such issues as strength of mark, similarity of mark, similarity of goods or services, channels of trade, and evidence of actual confusion. See Polaroid Corp. v. Polaroid Elecs. Corp., 287 F.2d 492, 495 (2nd Cir. 1961).

Trademark Infringement:
Likelihood of Confusion on the Internet
Likelihood of confusion can be hard to prove in a cybersquatting case. One is not likely to confuse a pornographic web site called adida.com with the genuine Adidas website.

Courts have also not unanimously embraced the notion that a domain name serves a trademark function – even if it incorporates a trademark.
Unfair Competition Action
Many cybersquatting instances do not match up well with the elements of an unfair competition action
Most often, though not always the cybersquatter is not a competitor – the objective is simply to divert traffic intended for the senior user to their non-competitive web site.
A non-judicial method of dispute resolution to which all domain name registrants consent as a condition of getting a domain name
Utilizes panels of arbitrators to make determinations
Relatively low cost and quick
Availability of Remedy
Domain name must be confusingly similar to trademark
Registrant must have no legitimate interest in the domain name
Domain name must be registered and used in bad faith
Practices Addressed by
Extracting payment from rightful owners of marks
Offering domains including trademarks for sale
Using domains to divert customers
to unauthorized sites and create
Engaging in consumer fraud
Elements of Cause of Action
Defendant must, with bad faith intent to profit, use a domain name that:
Is identical or confusingly similar to a distinctive mark;
Is identical, similar, or dilutive of a famous mark; or
Infringes marks and names protected by statute, like Red Cross or Olympics
: Difficult Standard
Courts have strictly applied bad faith standard, which is sometimes difficult to prove; less permissive than under UDRP
Expensive and time consuming – as is the case with all litigation
Many cybersquatters are notoriously
difficult to bring within the jurisdiction
of the courts
One common method of Internet-oriented advertising involves the sale by certain search engines of so-called keywords, which often consist of well-known trademarks

Sale of Keywords
The sale of keywords can occur in several different ways:
Placement in search engine results
Serving of pop-up ads
Use in metatags
The sale of keywords certainly constitutes free-riding on IP owners good will, but does not fit neatly into conventional trademark infringement analysis.
Initial Interest Confusion
Playboy Enterprises International, Inc. v.
Netscape Communications Corporation
Revived a case brought by Playboy challenging the practice of Netscape of selling ad placements based upon searches for the terms “Playmate” and “Playboy”.
1-800-Contacts v. WhenU.com, et. al.

Court granted preliminary injunction against a scheme in which defendants served competing pop-ups to web users based upon web users selection of particular products or services.
Currently there are 10 actions against The Gator Corporation, now known as Claria, consolidated for pre-trial purposes before the Judicial Panel on Multidistrict Litigation. Gator is a purveyor of a pop-up scheme, and the issues are similar to those in the WhenU cases.

First Circuit
The First Circuit Court of Appeals has been hesitant to recognize the theory of initial interest confusion as valid.
Hasbro, Inc. v. Clue Computing, Inc., 232 F.3d 1 (1st Cir. 2000)
Astra Pharmaceutical Products, Inc. v. Beckman Instruments, Inc., 718 F.2d 1201 (1st Cir. 1983)
Most recently, in The Beacon Mutual
Insurance Company v. OneBeacon
Insurance Group, 290 F.Supp.2d 241
(D.R.I. 2003) the Rhode Island District
Court declined to use the initial interest
confusion theoryas a basis for trademark infringement.
The Other View: Contrary Decisions
In at least two similar cases, courts have ruled against trademark owners:
Wells Fargo & Co. v. WhenU.com, Inc., 293 F.Supp.2d 734 (E.D. Mich. 2003)
U-Haul International, Inc. v. WhenU.com, Inc., 279 F.Supp.2d 723
(E.D.Va. 2003)
The courts found that the WhenU use was not a “trademark use”, but was a mechanical function.
Legislation v. Litigation
Legislatures might take the question of pop-ups and trademark infringement out of the hands of the courts by banning pop-ups altogether.
Utah recently passed the “Spyware Control Act” which prohibits:
Using a context based triggering mechanism to display an advertisement that partially or wholly covers a website
Using a federally registered trademark as a trigger for the display of an advertisement (unless permission based)
Using a triggering mechanism to display an advertisement according to a website accessed by a user (unless permission based)
California and Iowa have similar legislation pending.

Powerpoint, Part 1 of 3: Internet Law: Trademarks


2 Responses to "What You Need To Know About Internet Law: Trademarks"
Great information. This is an area that always seems confusing when you get down to launching a new website.
Thanks. Stay tuned -- more to come from the nice folks @ BI.

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