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Using and Managing Intellectual Property in an Online Business

Ned Himmelrich presented for MICPEL.  An outline of his presentation is below.

I.OVERVIEW

A.Definitions.

1.Patents:  Protection of the way something works or a design of an object.

2.Copyrights: Protection of artistic and creative works.

3.Trademarks: Name or logos as identification of source or quality.

4.Trade Secrets:  Information not generally known, that gives you an advantage and for which reasonable protective steps are taken.

5.Right of Publicity:  The right to use someone’s fame.

6.Internet related laws such as Anti-Cybersquatting Act; Digital Millennium Copyright Act.

7.Contract contents:  how to protect your interests by agreement.

B.Territoriality of laws.

1.Most cases are federal, though there are sometimes state claims.

2.State laws and federal laws follow same concepts; with slight differences between states and between circuits.

3.No registrations cross national borders (other than among the Europe Union -- CTM is a “Common Trademark”).

4.Treaties help in registrations, but do not create rights across a national border.

II.BASIC RIGHTS

A.Trademark.

1.Basis of trademark laws.

a.Common law:  Rights are based of usage of a mark in a territory.

b.Federal Rights based on 15 USC §1051 et seq.  Add to common law rights.

c.A corporate name filed with SDAT is NOT a trademark.  Such a filing satisfies no trademark rights.

2.Background.

a.Types of Marks.

i.Word or words (Motorola).

ii.Slogan (“you’re in good hands”).

iii.Logo (The Prudential rock).

iv.Color (pink fiberglass; thread in ironing board covers).

v.Combination (McDonald’s, with golden arches).

vi.Trade Dress (Pizza Hut roof).

b.Rule of Priority:

i.Party first in time to adopt and continuously use that mark for those goods (or services) in that geographic area has priority.  But note the effect of intent-to use application.

ii.Registration is not necessary for protection.  Common law use protects you in the geographic area where there has been use.

iii.Issues/Problems:

(a)Concurrent use:  similar, unregistered uses in separate areas.

(b)Adoption:  actually using name with the goods; publicly perceptible preparation is enough for services and maybe for goods too.

(c)Affixation:  using the name in proximity to or on the goods or advertising the services.

(d)Abandonment:  giving up use of name.

(e)Same, similar or related goods (or services).

(f)Area of Use: depends on type of use (dry cleaner vs. large retail chain).

URBAN MYTH:  “I own the word.”

No.  You may own a word for particular goods and services.

3.Likelihood of Confusion (In re. E.I. DuPont De Nemours & Co., 476 F. 2d 1357 (C.C.P.A. 1973)).  Test for determining infringement.

a.Is there a likelihood that consumers will be confused into thinking there is some common affiliation or sponsorship or that one was produced by the other.

b.Base analysis on perception of consumers of that particular good or service.

c.In testing for likelihood of confusion, the following, when of record, must be considered:

i.Sight, sound and meaning.

ii.Nature of the goods or services.

iii.The conditions under which and buyers to whom sales are made, i.e. “impulse” vs. careful, sophisticated purchasing (candy vs. automobiles) (Perini v. Perini).

iv.The fame of the prior mark (sales, advertising, length of use).

v.The number and nature of similar marks in use on similar goods (dilution).

vi.The nature and extent of any actual confusion.

vii.The length of time during and conditions under which there has been concurrent use without evidence of actual confusion.

viii.The variety of goods on which a mark is or is not used (house mark, “family” mark, product mark).

ix.Any other established fact probative of the effect of use.

d.Tarnishment is a form of dilution.  May have success in relying on this theory.  “...The subsequent use is ... is likely to undermine or damage the positive associations evoked by the mark.”  Restatement (Third) of Unfair Competition §25, comment g (1995).

e.Natural Expansion:  If the market could seem to expand into other areas, goods in that other area may also be protected (Televisions may lead to VCRs or stereos).

f.Reverse confusion:  Smaller senior user’s is incorrectly believed to be infringing on much larger junior user.

4.Anti-Dilution

a.15 U.S.C. 1125(c) -- Trademark Dilution Revision Act

b.Revised in 2006 from original 1996 version

c.For “Famous” marks

i.Widely recognized by the general consuming public of the United States as a designation of source of the goods or services of the mark’s owner

ii.Consider all relevant factors, including:

(a)The duration, extent, and geographic reach of advertising and publicity of the mark, whether advertised or publicized by the owner or third parties.

(b)The amount, volume, and geographic extent of sales of goods or services offered under the mark.

(c)The extent of actual recognition of the mark.

(d)Whether the mark was registered

d.Dilution by blurring

i.Association arising from the similarity between a mark or trade name and a famous mark that impairs the distinctiveness of the famous mark.

ii.Consider all relevant factors, including:

(a)Similarity between the mark or trade name and the famous mark.

(b)Inherent or acquired distinctiveness of the famous mark.

(c)If owner of the famous mark is engaging in substantially exclusive use of the mark.

(d)Recognition of the famous mark.

(e)If user of the mark or trade name intended to create an association with the famous mark.

(f)Actual association between the mark or trade name and the famous mark.

e.Dilution by Tarnishment

i.Association arising from the similarity between a mark or trade name and a famous mark that harms the reputation of the famous mark.

5.Distinctiveness.

a.Strong, distinctive marks will have greater protection and can limit more uses than can weak, non-distinctive marks.

b.Fanciful or Arbitrary (KODAK).

i.No significance of name, except that it signifies brand.

c.Suggestive (UNITED WAY).

i.Somewhere between Arbitrary and Descriptive.

ii.If imagination or thought is necessary to comprehend the term’s significance.  An extra step of though.

d.Descriptive.

i.This may be where most programs of a non-profit will fall.

ii.Protection not immediately available.

iii.Convey an idea of goods or services or describe properties or characteristics.

iv.Types:

(a)merely descriptive (HELPING HAND).

(b)primarily a surname (ABELL FOUNDATION).

(c)geographic (descriptive or misdescriptive) (HAWAIIAN PUNCH).

v.Secondary Meaning:

(a)To register or keep protection of descriptive marks, owner needs to show secondary meaning: show that the mark is used and advertised so extensively and exclusively that the mark has secondary meaning of source significance to consumers of that type of good, i.e. needs to be distinctive.

(b)Secondary meaning can be shown by the amount of money paid for advertising.

vi.Descriptive with Secondary meaning (HEROES) Heroes, Inc. v. Boomer Esiason Hero’s Found., 997 U.S. Dist. Lexis 12192; 43 U.S.P.Q.2D 1193 (DC Cir. 1997)), National Federation Of The Blind, Inc. v. Loompanics Enterprises, Inc., 936 F. Supp. 1232 (D.C. Md 1996).

e.Generic (tissue).

i.Can never be registered.

ii.No exclusive rights to mark.

iii.Generic (BLINDED VETERANS)  Blinded Veterans Assn. v. Blinded American Veterans Found., 872 F.2d 1035 (DC. Cir 1989)).

f.Key: Try to claim mark is as strong as possible.

g.Certification mark: a mark used in connection with the products or services of one or more persons other than the owner of the mark to certify regional or other origin, material, mode of manufacture, quality, accuracy or other characteristics of such goods or services or that the work or labor on the goods or services was performed by members of a union or other organization.

h.Collective Membership mark:  a mark used by the members of a cooperative, an association or other collective group or organization and includes marks used to indicate membership in a union, an association or other organization.

i.Breadth:

(a)Federal, State and Common Law Trademarks.

(b)State Trade names.

(c)You do not find (i) if you search (ii), and vise versa.  Need to search both.

URBAN MYTH:  “I have a trade name, so they cannot stop me from using the name.”

No.  Trade names filed at the state and trade names indicating a brand are two different things.

6.Researching availability

a.Rationale.

i.Is it safe proceed without infringing on another; will others be infringing; cost of keeping mark distinctive.

ii.The Opportunity Cost of going down the wrong path.

b.Trademark search:

i.“Knock-out” search:  USPTO - http://tess2.uspto.gov/bin/gate.exe?f=tess&state=6tu0km.1.1 or http://www.uspto.gov/main/trademarks.htmrademark.  

ii.Full search cost: $450‑$550 (various services, much less if online).

iii.Analysis is based on Likelihood of Confusion.

iv.Search if the name will be important or a lot of money will be spent to promote it.  If you could just as well change the name if there is a demand to do so, search is less necessary.

v.May be intentional infringer without it.  International Star Class Yacht Racing Association, v. Tommy  Hilfiger, U.S.A., Inc., 80 F.3d 749 (2nd Cir. 1996).

c.Google:

i.Advanced Search helps narrow the inquiry:  http://www.google.com/advanced_search?hl=en.

7.Territoriality

a.Rights throughout the US

i.Note that the rights are potential, so long as you have activity in that territory.  No ability to stop use in a territory where you are not present.

ii.Dawn Donut Company v. Hart’s Food Stores, Inc.  267 F.2d 358 (2d Cir. 1958)

b.The dilemma of trademark territoriality and the Internet.

i.Generally, a company only can establish protectable trademark rights in a territory when the company has customers in that territory or has shipped goods into that territory. 

ii.Merely having a webpage accessible on all computers throughout the United States is insufficient to establish trademark rights in all areas of the country. 

iii.Factors to show entity is using the mark through its Internet page:

(a)Relevant to show if you are using the mark to gain priority in an area, or if a distant user’s web page is an infringement here.

(b)Volume of sales in the area

(c)Growth trends

(d)Distribution to locations in the area

(e)Specific targeting of sales efforts to customers in the territory.

(f)If a website of another is merely an advertisement for services unattainable (or hard to attain) in the region, then the proprietor of the website might not be using the mark in the region.

B.Copyright.

1.Scope of Protectible Work.

a.Originality is key ingredient.  It does not have to be good or clever, just original.  Sheldon v. Metro-Goldwyn Pictures Corp., 309 U.S. 390 (1940), Judge Learned Hand stated that two people could independently create “Ode On A Grecian Urn” and not infringe on each other.

b.Types of works that can be protected:

i.literary works;

ii.musical works;

iii.dramatic works, including accompanying music;

iv.pantomimes and choreographic works;

v.pictorial, graphic and sculptural works;

vi.motion pictures and other audio-visual works; and

vii.sound recordings.

c.***KEY POINT***Ideas are not protectable.  The expression of the idea garners protection.

d.Facts are not protectible:  Feist Publications v. Rural Telephone Service, 499 U.S. 340 (1991) negated “sweat of the brow” copyright.  However, the presentation of facts have “thin protection”:  data base “artistically” selecting certain characteristics.  Kregos v. Associated Press, 937 F. 2d 700 (2nd Cir. 1991).  A data base of contributors or certain selected facts about them may be protectable through copyright (if not trade secret).

2.The Five Exclusive Rights.

a.To reproduce the work in copies or phono-records;

b.To prepare derivative works based on the work;

c.To distribute copies or phono-records of the works by sale rental lease or loan;

d.To perform the work publicly, in the case of literary, musical, dramatic, and choreographic works, pantomimes. and motion pictures and other audio visual works; and

e.To display publicly works that are literary, musical, dramatic and choreographic works, pantomimes and pictorial, graphic or sculptural works, including the frames contained in a motion picture or other audio visual work.

3.The Rights of Attribution and Integrity (17 U.S.C. 106A).

a.Since 1990.

b.Pertains to Works of Visual Arts only.

c.The right of the author to claim authorship and prevent distortions that would be prejudicial to the artist’s honor or reputation.

4.Ownership:

a.Section 101 of the Copyright Act defines a “work made for hire” as:

i.a work prepared by an employee within the scope of his or her employment; or

ii.a work specially ordered or commissioned for use as a contribution to a collective work:

iii.as a part of a motion picture

iv.as a part of other audiovisual work, 

v.as a translation, 

vi.as a supplementary work, 

vii.as a compilation, 

viii.as an instructional text, 

ix.as a test, 

x.as answer material for a test, or 

xi.as an atlas,

xii.if the parties expressly agree in a written document signed by them that the work will be considered a work made for hire.  For the purpose of the foregoing sentence, a “supplementary work” is a work prepared for a publication as a secondary adjunct to a work by another author for the purpose of introducing, concluding, illustrating, explaining, revising, commenting upon, or assisting in the use of the other work, such as forewords, afterwords, pictorial illustrations, maps, charts, tables, editorial notes, musical arrangements, answer material for tests, bibliographies, appendixes; and an “instructional text” is a literary, pictorial, or graphic work prepared for publication and with the purpose of use in systematic instructional activities.

b.If not a Work Made For Hire:

i.Hiring Party owns work if there is a written contract.

ii.Copyright assignment requires a written assignment.

iii.If no writing:  relationship is an implied non-exclusive license.  The terms of the license are the rights of use as the parties understand.

iv.Using and modifying software:  Be sure the license allows it.  Protection available for new additions.

c.An assignment must be in writing with “granting language”; otherwise, there is just a license.

d.Independent contractor:  But usually, the ad agency, software developer, website developer or other person who creates the work is not an employee, but is an independent contractor or entity.

e.***KEY POINT*** The law says that in this situation, unless there is an agreement stating otherwise, the independent contractor owns the work.  So, unless the hiring company and the agency/programmer/worker/artist have a written agreement, the “artist” owns the work.  The company probably has a license implied by the law to use the materials for the ad campaign/software use/other purpose the parties envisioned, but the company does not have the right to use the materials for purposes not originally considered by the parties.  The artist can stop the company from using the work. Ownership in a copyright transfers ONLY though a writing.  Otherwise, there is at most a non-exclusive license to use the work for some undefined period on some undetermined basis. Henri Dauman, v. The Andy Warhol Foundation et al., 1997 U.S. Dist. Lexis 8606; 43 U.S.P.Q.2D (D.C.N.Y. 1997).

f.Joint authorship:  Each has a right to use, with an accounting to the other.

g.Licensing:  Rights can be divided:

i.Geographically.

ii.Temporally.

iii.Restriction on type of use.

iv.Exclusive v. Non-exclusive.

v.GET A CONTRACT.

URBAN MYTH: “I paid for it to be developed; I own it.”

Comment:  Not necessarily.  Were you an employer?  Was it a Work Made For Hire

5.Duration:

a.General Rule of Thumb:  95 years from creation.

b.Works created before 1978 may be in public domain if they were published without copyright notice, or the registration was not renewed.

c.Good chart at:  http://wiht.link/publicdomainguide

6.Researching prior rights

a.Copyright database:  http://cocatalog.loc.gov/cgi-bin/Pwebrecon.cgi?DB=local&PAGE=First.

7.Infringement.

a.Substantial similarity and access (17 U.S.C. 501 et seq.).

b.Strict Standard:  no intent necessary (although intent is more heavily sanctioned).

c.Analyze only the protectable features.  Go through the “Abstraction, Filtration, Comparison” test.

d.Remember:  Ideas are not protectable:  The expression of the ideas is protectable.

8.Damages (17 U.S.C. 501 et seq.).

a.Injunctive relief.

b.Statutory Damages:  between $750 and $30,000 per infringement, up to $150,000 if willful  in lieu of punitive damages (or $200 if innocent).

c.Attorneys’ Fees.

d.Actual Damages (Plaintiff’s lost profits and any additional Defendant’s profits due to the infringement).

9.Fair use (17 USC 107).

a.The nature of the copyrighted work.

b.The amount and substantiality of the portion used in relation to the copyrighted work as a whole.

c.The effect of the use upon the potential market for a value of the copyrighted work.

d.The purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes.  Not for profits may have a bit of a leg up here; but beware of the myth of impunity.  ***KEY POINT***  (“Accordingly, the mere fact that a use is educational and not for profit does not insulate it from a finding of infringement, any more than the commercial character of a use bars a finding of fairness. If, indeed, commerciality carried presumptive force against a finding of fairness, the presumption would swallow nearly all of the illustrative uses listed in the preamble paragraph of §107, including news reporting, comment, criticism, teaching, scholarship, and research, since these activities “are generally conducted for profit in this country.”   Campbell v. Acuff‑Rose Music, Inc., 510 U.S. 569, 584, 114 S. Ct. 1164 (1994).

e.Examples:

i.Copying or “clipping” entire articles (or videotape) for distribution:  Occasionally may be fair use; regular copying is violation.

ii.Copying newsletters rather than passing around the original or subscribing to an extra copy:  Violation.

iii.Using a tune and or lyrics in an advertisement:  Possible violation.

URBAN MYTH:  “It’s on the Internet, so it’s available.”

Comment:  Not necessarily.  Copyright law still applies.

10.Notice.

a.For works published on or after March 1, 1989, notice is not required to maintain copyright protection.  The reason to continue affixing the notice is to defeat a mitigation of damages argument raised by an innocent infringer. After all, how can you be innocent in the face of a notice.

i.***HELPFUL TIP***Guarding against infringement:

ii.Provide a citation.  It is not a cure, and may require payment of a fee, if there is no fair use.

iii.Ask permission to use or modify.  Approval may cost money.

iv.Audit the work of designers/artists to be sure they are not taking from another.

v.Use copyright notice.

vi.Include in work statement describing permissible uses.

vii.Use password protection.

viii.Hide a device that the copier will not notice, but will include in the copy if they steal your work.  Errant name/purposeful typographical errors.

11.Digital Millennium Copyright Act 17 USC 512 and 17 USC 1201.

a.Provisions:

i.Makes it a crime to circumvent anti-piracy measures built into most commercial software.

ii.Outlaws the manufacture, sale, or distribution of code-cracking devices used to illegally copy software.

iii.Permits the cracking of copyright protection devices, to conduct encryption research, assess product interoperability, and test computer security systems.

iv.Provides exemptions from anti-circumvention provisions for nonprofit libraries, archives, and educational institutions who circumvent for the purpose of determining whether to acquire the work.

v.In general, limits Internet service providers from copyright infringement liability for simply transmitting information over the Internet.

vi.Service providers must remove material from users’ web sites that appears to constitute copyright infringement.

vii.Limits liability of nonprofit institutions of higher education -- when they serve as online service providers and under certain circumstances -- for copyright infringement by faculty members or graduate students.

viii.Requires that “webcasters” pay licensing fees to record companies.

b.Recent Cases:

i.Io Group, Inc. v. Veoh Networks, Inc., 2008 WL 4065872 (N.D. Cal. 2008), makes a number of important holdings in concluding that an online video sharing site (not dissimilar from YouTube) was protected from liability for copyright damages by a DMCA safe harbor.

ii.Lenz v. Universal Music Corp., et al., 2008 WL 3884333 (N.D. Cal. 2008), is the first case to squarely hold that copyright owners must conduct a fair use analysis before sending takedown notices pursuant to the DMCA, or face potential liability to users whose materials are the subject of such notices.

iii.Viacom Inc. vs. YouTube, Google Inc.  In March 2007, Viacom filed a lawsuit against YouTube and its corporate parent Google for copyright infringement seeking more than $1 billion in damages.  The complaint was filed in the U.S. District Court for the Southern District of New York.  Viacom claims the popular video-sharing site was engaging in “massive intentional copyright infringement” for making available a contended 160,000 unauthorized clips of Viacom’s entertainment programming.  Google lawyers say they are relying on the 1998 Digital Millennium Copyright Act to shield them from liability.  In March 2008 the judge ruled that Viacom cannot seek punitive damages against YouTube, however, statutory damages, remain a possibility.  The case is unlikely to go to trial until late 2009 or 2010.

C.Patents.

1.Protection of Software: 

a.Copyright protects the code

b.Patents protect a thing, method or the outcome of the code.

2.Protection based on a claim:

a.Example:  A computer readable medium storing executable instructions for (steps A, B, and C).

b.Example:  Claim a computer implemented method for X, comprising:
Step A, performed by a computer,
Step B, performed by a computer, etc.

c.Example:  Claim a system configured to do X, comprising,
a computer (or server or db) configured to A,
a computer (or server or db, etc)
configured to B, etc.

3.Researching prior claims

a.USPTO – Patent.:  http://patft.uspto.gov/.

4.History: 

a.The Classical Era:  Software not patentable

i.In the dawn of the computer age, computer software was considered unpatentable because it consisted of unpatentable mathematical algorithms.

b.The Enlightenment:  Software patentable

i.In a series of cases, the Supreme Court established patent eligibility for computer software. 

ii.Gottschalk v Benson , 409 U.S. 63 (1972) ("[I]t is said that the decision precludes a patent for any program servicing a computer. We do not so hold.”)

iii.Diamond v. Diehr, 450 U.S. 171 (1981) (establishing the patent-eligibility of processes involving use of a computer program or algorithm to control the operation of a machine to perform an otherwise known physical process)

c.The Post Modern (current) Era:  Software patentability limited

i.In re Bilski, 88 U.S.P.Q.2d 1385 (2008) hold that business method patents that are neither tied to a specific machine nor change something into a different state are not patentable). See http://www.patentlyo.com/patent/2008/10/in-re-bilski.html.

ii.Some believe this may invalidate hundreds of software patents.

iii.In re Bilski  jettisoned the previous rule adopted in State Street Bank & Trust Co. v. Signature Financial Group Inc., 149 F.3d 1368 (Fed. Cir. 1998) that it is patentable if it involved some practical application and has “a useful, concrete, and tangible result.”

iv.In re Bilski did not eliminate all software and business methods patents.  The court made it clear that if they meet the “machine or transformation test” business methods and software will still be patentable.

v.In re Bilski expounded on its rule: “a claim that recites 'physical steps' but neither recites a particular machine or apparatus, nor transforms any article into a different state or thing, is not drawn to patent-eligible subject matter."  Hence, a claimed process where every step may be performed entirely in the human mind, the machine-or-transformation test would lead to unpatentability.

5.Debate about Software Patents

a.The proponents of software patents argue that it promotes investment in research and development while protecting the intellectual property.

b.The opponents of software patents argue that software can be protected by copyright, software is not suited for patents and the patent process, and it hinders further development of innovation.  The open-source and free-ware communities have been extremely vocal opponents of software patents.

D.Trade Secrets.

1.Maryland Uniform Trade Secrets Act (Md. Code Comm'l, Title 11, Subtitle 12)

2.Also common law

3.Trade Secret under MUTSA:

a.Information, including a formula, pattern, compilation, program, device, method, technique, or process, that

b.Derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use, AND

c.Is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.

4.Those liable are:

a.Those who take or misuse the trade secret.

b.Those who use what they have reason to believe is a misappropriated trade secret.

5.Remedies are:

a.Injunction.

b.Actual Damages unjust enrichment, reasonable royalty, punitive of 2 times award.

c.Attorneys fees.

6.Manner of keeping Trade Secrets:

a.Employee manuals or policies.

b.Care in handling and storing information that is a Trade Secret.

i.Lock it up.

ii.Tell only those you know are authorized to know.

iii.Do not put information in your top desk drawer or on your bulletin board.

iv.DO NOT PUT TRADE SECRETS WHERE THEY CAN BE UPLOADED

c.Confidentiality Agreements.

i.Identify what is a Trade Secret.

ii.State prohibitions on their use.

iii.Be certain employee recognizes rights of others the Company deals with.

iv.Trade Secrets are best kept by means of Confidentiality Agreements.

d.New employees should tell new employers of any prior obligations (written or otherwise).

E.Rights of Publicity and Privacy.

1.Right to be left alone and private information kept private.

2.Right to control use of name, likeness, voice.

a.Right to collect fees for licensing rights of publicity.

3.After death:

a.Right of privacy is not descendible.

b.Right of publicity is descendible in most states.  Where decedent resided at death.

4.Ads, models, ad agencies, copy writers:  Independent contractors -- get agreements and ownership.

URBAN MYTH:  “We have the permission of the person in the photo; that’s all we need.”

No.  You need the photographer’s permission.

F.Advertising

1.Incorporates:

a.First Amendment law

b.Trademark law

c.Copyright law

d.Employment law

2.First Amendment, etc

a.The First Amendment right to free speech does give you the right to express opinions, but in advertising, there are some limits  But law is merely a series of balances.  In advertising, the balance is: Commercial vs. non-commercial speech.

b.FTC:   One such aspect that probably plays the largest role in the advertising area is the Federal Trade Commission -- FTC.  This agency is the federal watchdog for the consumer. 

c.Industry specific regulations:  Language that is usually read quickly at the end of a radio or TV ad, or printed in small writing at the bottom of a print ad.  Many industries have their own codes and regulations and self imposed standards/ (safe harbors: which is a way you can act and know you will not get into trouble).

3.Comparative ads: 

a.You are allowed to compare yourself to the opposition.  ***KEY POINT***There are only two requirements: 

b.You must be truthful:

i.If you make an absolute statement, it has to be true.  But the court has to determine if the statement is one of fact or “puffery”.

c.You must not give a false impression that you are somehow affiliated with the other entities:

i.The major principal in trademark law (which we discussed above) is that you cannot falsely show that you are connected with another entity or its product in a way that is likely to confuse the consumer.  That principle is raised here.

4.Use of copyrighted work  

a.In advertising, the key is to get the permission of the author or owner of the copyright is you want to use anything that you have not created.

b.This is not like a term paper, where you can cite to a reference and be done with it.

c.In the world of business, permission costs money.  Permission can be denied, unless the correct price is given.

d.Pictures/Photos

i.In print media, the use of a print or photograph is the widespread problem.  If the picture was not taken specifically for the ad, be careful.  Someone took the picture.  Someone drew the picture.  That person will eventually see that you have used their picture, and they won't be happy not to be paid for their effort.

ii.Even a picture of a common object is protectable.  If you want to advertise the merits of a Raven, send out your own photographer or license rights to use a photograph you like.  Do not just copy something out of a book or poster.  The photographer who took the picture of the bird you like had to make certain artistic decisions to capture that photograph, even if it looks like every other picture of a black bird.

G.Domain Names.

1.Rule of priority:

a.First to register domain name wins, except

b.When a trademark registration issued by any country predates the domain name registration at issue.

c.Or bad faith/infringement

d.***HELPFUL TIP*** Inertia favors the domain name registrant.  Get domain names.

2.Researching availability

a.Domain name ownership:  Whois.

b.Network Solutions:  http://www.networksolutions.com/whois/index.jsp.

c.Register.com:   http://www.register.com/whois.rcmx;jsessionid=8511FB8028C7734F3FE31D9388F2CDB6.janus-production.

d.Europe:  http://www.eurodns.com/domain-name-search/.

3.Anti-Cybersquatting Consumer Protection Act.

a.15 USC 1125(d)

b.Early courts attempted to use traditional trademark doctrines of dilution and infringement to settle cybersquatting cases.  By the late 1990’s it became apparent that it was not working.

c.Congress passed the Anti-Cybersquatting Consumer Protection Act (“ACPA”), which created section 43(d) of the Lanham Act.

d.The ACPA created a new cause of action for any trademark owner who could prove:

i.The defendant registered, is using or is trafficking,

ii.A domain name that is confusingly similar to the plaintiff’s mark, and

iii.That the defendant had a “bad faith intent to profit” from the mark.

iv.The ACPA lists nine non-exclusive factors to determine if the defendant had bad faith.

e.The ACPA also provides a remedy for the unauthorized use of personal names as domain names, and provides for an in rem proceeding against the domain name where the registrant is not subject to personal jurisdiction or has concealed its identity.

f.Case law.

i.Regular Cybersquatting:

(a)A court ordered a cybersquatter to pay $500,000 in damages.  Electronics Boutique Holdings Corp. v. Zuccarini, 2000 U.S. Dist. LEXIS 15719, 15 (E.D. Pa.).

ii.Social Commentary Cybersquatting:

(a)People for the Ethical Treatment of Animals v. Doughney, 263 F.3d 359 (4th Cir. 2001).  PETA won its right to the peta.org domain name against defendant, who had erected the site “people eating tasty animals” -- old site now at http://www.mtd.com/tasty/.

iii.Typosquatting:

(a)AT&T Corp. v. ATT&T, Incorporated, Civ. A. No. 00-699-SLR, 2002 U.S. Dist. LEXIS 24079 (D. Del. Oct. 31, 2002).  ATT&T found confusing with AT&T

(b)The Sports Authority Michigan, Inc. v. Banks, Nat’l Arb. Forum Decision, Claim Nos. FA0307000173374, FA0307000173376 and FA0307000175287 (October 6,2003).  Defendant used sportsauthoity.com, sportsauthroity.com and thesportsauthoroty.com.  Arbitration Panel (See UDRP below) found the use to be in bad faith.

iv.Sucks:

(a)Bosley Medical Institute, Inc. v. Kremer., 403 F.3d 672 (9th Cir. 2005).  Non-commercial use of trademark as or as part of a domain name (thatcompanysucks.com) for a website containing consumer commentary is not infringing.  Having a link to a discussion group that then links to commercial advertisers does not make the use commercial or infringing.

4.The Uniform Dispute Resolution Procedure (“UDRP”).

a.The UDRP provides a streamlined fast-track determination of rights to a domain name through non-binding arbitration.

b.Proceedings are resolved on the basis on written submissions with hearings only being held in exceptional cases.

c.Claims must meet the following:

i.Domain name is identical or confusingly similar to a trademark or service mark in which the complainant has rights; and

ii.User has no rights or legitimate interests in respect of the domain name; and

iii.User’s domain name has been registered and is being used in bad faith.

d.Bad Faith is a key element:  “For the purposes of [making a claim]the following circumstances, in particular but without limitation, if found by the Panel to be present, shall be evidence of the registration and use of a domain name in bad faith:

i.circumstances indicating that you have registered or you have acquired the domain name primarily for the purpose of selling, renting, or otherwise transferring the domain name registration to the complainant who is the owner of the trademark or service mark or to a competitor of that complainant, for valuable consideration in excess of your documented out-of-pocket costs directly related to the domain name; or

ii.you have registered the domain name in order to prevent the owner of the trademark or service mark from reflecting the mark in a corresponding domain name, provided that you have engaged in a pattern of such conduct; or

iii.you have registered the domain name primarily for the purpose of disrupting the business of a competitor; or

iv.by using the domain name, you have intentionally attempted to attract, for commercial gain, Internet users to your web site or other on-line location, by creating a likelihood of confusion with the complainant’s mark as to the source, sponsorship, affiliation, or endorsement of your web site or location or of a product or service on your web site or location.

e.User shows a legitimate interest by:

i.before any notice to you of the dispute, your use of, or demonstrable preparations to use, the domain name or a name corresponding to the domain name in connection with a bona fide offering of goods or services; or

ii.you (as an individual, business, or other organization) have been commonly known by the domain name, even if you have acquired no trademark or service mark rights; or

iii.you are making a legitimate noncommercial or fair use of the domain name, without intent for commercial gain to misleadingly divert consumers or to tarnish the trademark or service mark at issue.”

f.UDRP Policy, http://www.icann.org/udrp/udrp-policy-24oct99.htm.

g.Search for decisions:  http://www.icann.cl/cgi-bin/udrp/udrp.cgi.

H.Children’s Online Privacy Protection Act of 1998 (COPPA).

1.Federal law:  15 U.S.C. §6501-06, effective April 21, 2000.

2.Provides oversight of what information is collected from children and how information may be used.

3.COPPA applies to:

a.Operators of commercial Web sites and online services directed to children under 13 that collect personal information from them; operators of general audience sites that knowingly collect personal information from children under 13; and operators of general audience sites that have a separate children’s area and that collect personal information from children under 13.

4.COPPA requires operators to:

a.Post a privacy policy on the homepage of the Web site and link to the privacy policy on every page where personal information is collected.

b.Provide notice about the site’s information collection practices to parents and obtain verifiable parental consent before collecting personal information from children.

c.Give parents a choice as to whether their child’s personal information will be disclosed to third parties.

d.Provide parents access to their child’s personal information and the opportunity to delete the child’s personal information and opt-out of future collection or use of the information.

e.Not condition a child’s participation in a game, contest or other activity on the child’s disclosing more personal information than is reasonably necessary to participate in that activity.

f.Maintain the confidentiality, security and integrity of personal information collected from children.

5.To encourage active industry self-regulation, COPPA includes a safe harbor provision allowing industry groups and others to request Commission approval of self-regulatory guidelines to govern participating Web sites’ compliance with the Rule.

6.FTC actions for failure to comply with COPPA requirements

a.Targets include Girl’s Life, Inc, Mrs. Field’s Cookies and Hershey Foods. 

b.Xanga was fined $1 million for repeatedly allowing children under 13 to sign up for the service without getting their parent’s consent;

7.See http://www.ftc.gov/privacy/privacyinitiatives/childrens_lr.html for more detailed information.

URBAN MYTH:  “I have protected my idea”

No:  You have protected the implementation/expression of your idea.

III.REGISTERING DEVELOPED IP

A.USPTO – Trademark.

1.Benefits of registration

a.Rights throughout the US

b.Presumption of valid mark

c.Stop infringing imports

2.Federal Registration.

a.The importance of the use dictates if there will be a need to register it.

b.Types of Federal Registration.

i.Principal Register: highly desirable.

(a)For arbitrary, fanciful, suggestive, and descriptive (with secondary meaning) marks.

(b)Presumption of valid mark;

(c)Shows up on searches by others;

(d)Allows use of ® symbol.

ii.Supplemental Register.

(a)For descriptive marks.

(b)Shows up on searches by others;

(c)Need to show use for one year before registration allowed;

(d)Allows use of ® symbol

iii.Intent to Use.

(a)Based on bona fide intent to use the mark.

(b)Date of first use is considered the date of filing the application.

(c)Used as a reservation process.

(d)Registration does not issue until use occurs.

(e)Extensions of time possible in 6-month intervals for a total of 24 months.

c.Duration:

i.10 years if registered on or after November 16, 1989.

ii.20 years if registered before November 16, 1989.

d.Registration Application Requirements.

i.Need actual use (except for intent-to-use, as described above):  Need to sell or offer for sale the goods or services in connection with the mark in interstate commerce.  Although mere preparation is becoming more accepted (maybe more for first use in litigation than for applications).

ii.One specimen must be submitted.

(a)Goods: name as affixed to goods or placed in proximity to goods.  Must submit actual thing, or if impossible, pictures.

(b)Services: stationary showing use (not merely blank stationary, unless the stationary says what the service is), receipts, pictures; not advertisements.

iii.Registration fee of $325 per class.

(a)45 classes (34 goods, 11 services) (plus Certification and Collective classes).

e.Timing.

i.Registration issued at least nine months after initial application.  PTO is very backed up.

ii.If passes through PTO, mark is published for opposition in Official Gazette to allow third parties the opportunity to oppose a mark which might harm them.

iii.If passes through opposition period, registration is issued.

iv.With ITU, after publication, a Notice of Allowance is issued.  Use must commence within 6 months, or else you can renew for up to four 6-month periods (the first without cause), with a fee of $100 per renewal.

f.Post Registration.

i.File affidavits of use and incontestability between 5th and 6th anniversary of issuance of registration:

(a)Affidavit of Use: so mark is not automatically deleted from register after 6 years.

(b)Affidavit of Incontestability: conclusive evidence of registrant’s exclusive right to use the mark.  So mark cannot be challenged unless fraud or other major problems with original application are proved.

(c)Put date on tickler system.

ii.Renew registration before expiration.

(a)Put date on tickler system.

iii.Cancellations are always possible.  A registration is not a guaranteed right.

g.Failure to use notice of registration disallows claim for profits and damages, unless there is actual notice.

h.Losing registration does not deny owner’s rights in the mark, ownership merely reverts back to common law rights.

i.Upkeep of marks.

i.Diligence is evidence of strong mark; it avoids dilution.

(a)Litigate common law uses, where known.

(b)Oppose Trademark applications.

ii.Have any of the various services watch Official Gazette and common law uses.

iii.Put important renewal dates on tickler system.

B.Copyright.

1.Benefits.

a.Registration is not a requirement for protection.  But……

b.Registration is necessary for works of U.S. origin before an infringement suit may be filed in court.  If the registration was not filed before the infringement it will delay a lawsuit because it will take four months or more to receive a Certificate of Registration.

c.The real reason to register is that statutory damages and attorney’s fees will be available to the copyright owner in court actions if registration is made within 3 months after publication of the work or prior to an infringement of the work. Otherwise, only an award of actual damages and profits is available to the copyright owner.  Courts may award statutory damages between $750 and $30,000 per work; the minimum damage award is reduced to $200 if the infringement is innocent; and the maximum increased to $150,000 if willful.  (Another good reason to place a copyright notice on all of your work because willful infringement usually means knowledge of copyright protection).

i.A good illustration of this is Getaped.com, Inc. v. Cangemi, Shields and Ski Cycle Hut, 188 F.Supp.2d 398 (D.C.N.Y. 2002).  The U.S. Magistrate found that there was $1,050 of actual damage and awarded that amount.  The District Court reviewed the case and based on the registration also awarded $30,000 in statutory damage and $16,015 in attorney fees and costs. A nice return on the $30 registration fee!  Compare Jack Mackie v. Connie Rieser and Seattle Symphony Orchestra Public Benefit Corp., 296 F.3d 909 (9th Circuit, 2002) (the court awarded only $1,000 of actual damage despite clear copyright infringement and much larger sums of indirect damages and fees).

d.Registration allows the owner of the copyright to record the registration with the U. S. Customs Service for protection against the importation of infringing copies.

e.Gateway to register with US Copyright Office: http://www.copyright.gov/eco/index.html

C.Domain names.

1.Choose the registrar to your liking.  Check out the Godaddy Super Bowl ad over the weekend.

2.Owner’s name:

a.Listing the actual owner’s name

b.Do not list an employee’s name

c.Do not let your ad agency register for you, and list its name.

3.Hiding behind an identity screen.

D.Trade secrets.

1.No registration – just keep the secrets

2.Rights enjoyed without registration.

E.Patent.

1.US Patent and Trademark Office

2.No protection until registered

3.Call a patent attorney – Must be registered with the PTO

4.Provisional patent:  File informally first, then file formally within twelve months.  No need for filer to be registered

a.https://sportal.uspto.gov/secure/portal/efs-unregistered

URBAN MYTH:  “I need to get a registration so I have a trademark or copyright”

No:  You have at least some level (usually a lot) of protection for all intellectual property, even without registration.  Patent protection is based on registration.

IV.ACQUIRING RIGHTS FROM THIRD PARTIES.

A.Assignments.

1.An owner may assign all its rights in the protected material.  In an assignment, the owner relinquishes all rights in perpetuity in the assigned material. 

2.Owner cannot retain a right to terminate the agreement.

3.Any clause withholding any right creates a license.

4.Copyright is only area specifically requiring written assignment.  Without words “I assign,” there is no copyright assignment.  For patent and trademark, assignment might be inferred.

5.Trade Secret is an odd thing to “assign.”

6.Recordation is not necessary for any assignment to be effective, but it is a prudent practice.

B.Licenses.

1.Division of the whole bundle.

a.One or more right must be held back.

b.Duration; territory; purpose of use, exclusivity.

2.Patents.

a.If no stated term, patent license is in effect for the life of the patent.

b.Patent license can not require royalties to be paid after the life of the patent. Brulotte v. Thys Co., 379 U.S. 29 (1964).

3.Copyrights.

a.Under the Copyright Act, an exclusive copyright license is included in the statutory definition of “transfer of copyright ownership” and therefore must be in writing signed by the owners. 17 U.S.C. §§101, 204-05.

b.Under the Copyright Act, the author (or heirs) have a non-waiverable right to terminate the license after a specific number of years (ranging from 35 to 56 years). See 17 U.S.C. §203.

c.As a Licensee, make sure you get all parts of the whole:  Music licensing is a good example.

4.Trademarks.

a.To protect the goodwill represented in a trademark, a Licensor MUST exercise quality control over the license product/service.  The failure to do so may result in a loss of trademark rights.

i.Right to control AND actual inspection are critical.

ii.Amount of control required is different in every situation.

iii.License without any control is a “naked license.”   Deemed abandoned by the Licensor. E.g. Barcamerica Intern. USA Trust v. Tyfield Importers, Inc., 289 F.3d 589 (9th.Cir. 2002).

iv.The quality control must be exercised and not just in the contract. Dawn Donuts Co. v. Hart’s Food Stores, 26 7 F.2d 358 (2nd.Cir 1958).

(a)Some courts have recognized rights of the Licensor in a naked license, if there was actual sufficient control. Stockpot, Inc. v. Stock Pot Restaurant, Inc., 220 USPQ 52 (1983).

b.Strategies/Terms:

i.Licensors should include a set of usage guidelines, including: proper use and misuse, style, color, format, size, and placement restrictions.

ii.Licensor may also prohibit the use of the mark with another mark and registering domain names using the mark.

iii.License agreement should state who is responsible for maintaining the trademark with the U.S. Patent and Trademark Office.

5.Trade Secrets.

a.Not really a “license.”  Rather, owner agrees to disclose the secret to a third party for a limited purpose.

b.Inherent difficulty:  How to use reasonable efforts (as required) to keep them secret and also license to a third party?

c.Varying degrees of diligence.

d.Sufficiently describe the trade secret in the agreement so that it can be identified in case of litigation but in a manner that does not reveal secrets.

e.Licensor must impose obligations on Licensee’s reasonable efforts to maintain the secrets.  Be specific:  restrictions on those who can see secrets, requirements to keep in secure environment.

C.Risk Allocation in Licensing.

1.Licensee’s Risks.

a.Inability to recoup its investment over the term of the agreement.

b.Potential loss of market share to competitors who knock-off licensed rights or who develop substitutes.

c.Other Licensees.

2.Licensor’s Risks.

a.Licensee’s failure to commercialize the products completely.

b.Licensee’s designing around the licensed rights and offering competing products.

c.Licensee’s wrongful disclosure of the Licensor’s trade secrets.

d.IP rights that end up in the public domain.

D.Specific Terms of License Agreement:

1.Licensor/Licensee.

a.Parent company or a subsidiary?

i.Will affect if there are limitations on ownership, assignments and/or transferability.

2.Grant of License.

a.Describes the trademark(s) being licensed and the specific rights being granted.

b.Often drafters miss the active verb of granting the license.

3.Scope of License.

a.Define what license is allowed to do,

i.Use very specific terms: use, make, have made, sell, offer to sell, import.

b.What products will Licensee be allowed to manufacture/distribute/sell?

i.Limit the number of products to those that correspond to the Licensee’s manufacturing/selling expertise?

ii.All products currently in Licensor’s product line?

iii.New developments?

iv.Consider field of use limitations.

v.Consider the nature of Licensee’s business, customers and manufacturing capacity.

vi.Consider how Licensor might expand its product line, and whether potential new products would exceed the scope of what Licensee could produce and/or sell.

4.Territory.  Where will Licensor allow the Licensee to manufacture and sell?

a.Where does the Licensee distribute similar products?

b.Is the Licensee capable of covering the entire territory?

5.Exclusivity.  Is Licensee the only third party to whom the rights are being granted?

a.Non-exclusive:  Licensor retains rights to use the IP itself, to license it to others, or both.

b.Exclusive:

i.Licensee is only entity granted the rights to use the IP.

ii.Exclusivity can be allocated among different rights: geographic territory, trade channels, or specific products and services.

iii.Exclusive license may be very broad, and close to an assignment.

iv.Grant exclusivity only in exchange for minimum sales goals and Licensee’s agreement not to manufacture/distribute competing products.

v.Exclusive agreements generally have an implied best-efforts obligation on the Licensee. See Wood v. Lucy, Lady Duffgordon, 118 N.E. 214 (N.Y. 1917), Brandner v Stelnick, 568 N.W.2d 322 (Wis.App 1997).

c.Sole.

i.In a sole licensing arrangement, Licensor retains the right also to use the IP for the licensed goods or services.

ii.Licensor may want to reserve the right to deal with certain customers or segments of the market.

iii.Granting sole manufacturing/distribution rights is preferable to granting broad exclusivity rights.

d.Exclusivity or sole manufacturing rights should lapse on the Licensee’s breach, not on termination.  Thus, if Licensee contests the Licensor’s termination, Licensor can appoint someone else in the territory without waiting for the larger dispute to be concluded.

6.Term.

a.Term should be long enough to enable Licensee to recoup its investment.

b.Consider renewal.

c.Consider different terms for different aspects of license.

7.Termination and Rights after Termination.

a.Describe when and how License can be terminated: failure to meet specific sales or distribution target; breach; bankruptcy; acquisition of a party.

b.Wind-down of use, manufacture, sale?

c.Rights to inventory after termination?  Destroy or buy back?

8.Royalties.

a.Tied to net sales, units sold or other factors?

b.Reductions:  refunds, promotions, overhead, commissions, taxes, affiliate sales?

c.Timing of payment?  Supply sufficiently detailed reports?

d.Audit rights?  Reimburse audit fee if >5% discrepancy.

9.Sublicensing:

a.The pros:

i.Expands the market for the licensed products.

ii.Licensee has opportunity for additional income (and greater royalty).

iii.May be necessary if more than one country is involved.

b.The cons:

i.May make territory too large.

ii.Licensor loses some control; make sure sublicense states privity.

10.Marking.  Require Licensee’s packaging to show marking.  Especially true of patents, where notice of registration is critical.

V.Miscellaneous topics:

A.Providing a link and not a screen shot.

1.Avoid the perils of copyright law – do not reprint the copyrightable materials of a website.

2.Using too prominent of a link might show affiliation or sponsorship.

a.Ticketmaster Corp. v. Tickets.com, Inc., 2000, U.S. Dist. LEXIS 12987 (C.D. Cal. August 10,2000).  Link to Ticketmaster site from tickets.com.  Notice adjacent to hyperlink clarified that defendant could not sell the tickets, but was a referral to a seller.  No passing off, No likelihood of confusion.

B.Export of software

1.Any use of the software outside of the US or in the US by foreign nationals.

2.Export of technology products may be controlled by federal regulations.

3.Any product that includes software with encryption functionality must be reviewed to determine its export status before being exported or re-exported.

4.In certain cases, the exporter may have to notify the U.S. Department of Commerce’s Bureau of Industry and Security (BIS) or request a formal classification review before exporting. 

5.Considerations for determining whether an export license is required

a.What are you exporting?

b.Where are you exporting?

c.Who will receive your item?

d.What will your item be used for?

e.  If the item you are seeking to export is on the Commerce Control List   ("CCL"), cross-reference any control codes for that item against the Commerce Country Chart for the particular country to which you are exporting.

i.Commerce Control List:  (15 CFR Chapter VII, Subchapter C, Part 774 Supplement 1 of the Export Administration Regulations (EAR), available at http://www.access.gpo.gov/bis/ear/ear_data.html

ii.Alphabetical list of CCL items is available at http://www.access.gpo.gov/bis/ear /pdf/indexccl.pdf.)

iii.Commerce Country Chart  (15 CFR Chapter VII, Subchapter C, Part 738 Supplement 1 of the EAR available at http://www.access.gpo.gov/bis/ear/pdf/738spir.pdf

f.Items not on the Commerce Control List are designated as EAR99.  EAR99 items do not need to obtain an export license, provided that you are not seeking to export the items to an embargoed country, to an end-user of concern, or in support of a prohibited end use.

6.A good resource: http://www.bis.doc.gov/licensing/exportingbasics.htm.

 

VI.Cases in the News.

A.Google:  Trademarks as Keywords for Advertising.

1.Target advertising uses keywords.  Google is leader.

2.When a search including a keyword is entered, specific advertisements are displayed.  For example could Ford Co. buy the keyword “toyota”?

3.Traditionalists say this is infringing, as the user rides on the fame of the trademark owner.

4.Others say the inclusion of trademarked keywords is not considered “use” under the Lanham Act and therefore there is no trademark infringement.  1-800 Contacts, Inc. v. WhenU.com, Inc., 414 F.3d 400 (2nd.Cir. 2005 (N.Y.) (“there is no allegation that defendant places plaintiff’s trademarks on any goods, containers, displays, or advertisements, or that its internal use is visible to the public”).  Once use is found, that use must still create confusion.

5.Government Employees Insurance Company v.Google, Inc., et al., 2005 U.S. Dist. LEXIS 18642 (E.D. Va. Aug. 8, 2005).  Court rejected Google’s motion to dismiss.  “Use exists” when Google allows an advertiser to pay to have its ad appear next to the regular listing of results.  Survey results validly showed a likelihood of confusion due to sponsored appearing in the heading or text of the ad.  However, use of word GEICO as the trigger to sponsored links which did not reference GEICO’s marks in the heading or text of the ad did not violate the Lanham Act or Virginia common law – survey purporting to show likelihood of confusion was flawed.

6.Litigation continues.  Recently American Airlines sued Google in Texas. American Airlines v. Google, 4:07-cv-00487 (N.D. Tex. complaint filed Aug. 16, 2007).

B.The Use of Trademarks in Meta-Tags.

1.Meta-tags are information or hidden-code, incorporated into a website.  This information is not displayed to a visitor to the site.  This information is used for various reasons, including helping search engines quickly determine if a website is relevant to a search request.

2.Earlier cases held that the use of a third party’s trademark in meta-tags was a per se trademark infringement.  Courts relied on the initial interest confusion doctrine.  See Brookfield Communications, Inc. v West Coast Entertainment Corp, 174 F.3d 1036 (9th Cir. 1999) and McCarthy, Trademarks and Unfair Competition § 25:69.

3.Later cases limited the initial interest confusion doctrine.  See Gibson Guitars Corp. v Paul Reed Smith Guitars, 423 F.3d 539 (6th.Cir. 2005 (Tenn)), Lamparello v Falwell, 420 F.3d 309 (4th.Cir. 2005 (Va.).  (per 1-800-Contacts v. WhenU.Com, Inc., 414 F.3d 400 (2d Cir.2005)) that “use” was a threshold matter without which any further claims could not stand.  Site Pro-1, Inc. v. Better Metal, LLC, 2007 WL 1385730, (E.D.N.Y. 2007).  Limitation could affect trademarks in meta-tags as per se trademarks infringement.

4.Some recent cases continue to apply the initial interest confusion doctrine and found that trademarks in meta-tags are per se trademarks infringement. E.g.  Tdata Inc.v Aircraft Technical Publishers, 411 F.Supp2d 901 (S.D. Ohio 2006).  North American Medical Corp. v. Axiom Worldwide, Inc., 2008 WL 918411 (CA 11, April 7, 2008).

C.Liability for selling other’s infringing article on your site.

1.Tiffany v. EBay,  576 F.Supp.2d 463 (S.D.N.Y., July 14, 2008).

2.Direct infringement: 

a.Court denied claims of direct and contributory trademark infringement against eBay, even though research showed that the majority of claimed Tiffany products for sale on eBay were counterfeit . 

b.eBay found that as a legitimate seller of Tiffany goods, eBay had the right to use the Tiffany marks under the nominative fair use doctrine.

c.Court also ruled fair use rights extended to the use of the Tiffany name in advertising as long as legitimate sales of Tiffany items on its site were taking place.

3.Contributory infringement:,

a.Similar to flea market cases, not an online classified ad service

b.eBay was in enough control of its users’ actions to apply the contributory infringement test of Inwood Labs v. Ives Labs, 546 U.S. 844 (1982). 

c.eBay’s termination of listings of counterfeit items immediately upon notification showed that eBay did not “know or have reason to know” of infringement under the Inwood test.

d.It is insufficient that eBay should have “reasonably anticipated” infringement.

4.In the 1990s, some case law suggested that affirmative efforts to suppress user activity might exacerbate liability, so the preferred strategy was to remain “passive” with respect to users. eBay chose a different approach.  It proactively attempted to reduce the incidence of counterfeiting on the site.

5.The courts in two prior international cases brought by luxury brands (Rolex in Germany and Louis Vuitton in France) had ruled against eBay.  The divergent opinions may pose a challenge to eBay’s operation of a single global marketplace.

D.First Amendment vs. Online Defamation

1.Local Pending Case: Maryland Court of Appeals Independent Newspapers, Inc. v. Zebulon J. Brodie, Sept. Term 2008, No. 63.

2.Plaintiff argues that host of an online forum should be forced to reveal the identities of people who posted allegedly defamatory comments. 

3.Case of first impression in Maryland

4.The businessman, Zebulon J. Brodie, contends that he was defamed by comments about his shop, a Dunkin’ Donuts in Centreville, posted on NewsZap.com.  The shop was described as one “of the most dirty and unsanitary-looking food-service places I have seen.”

5.The comment was posted in a 2006 exchange among anonymous posters

6.Plaintiff is demanding that Independent Newspapers Inc.

7.A Queen Anne’s County Circuit Court judge in ordered the company to hand over the information and the company appealed.