Advanced Technology Seminar - Intellectual Property Online (Continued)

1. Advanced Technology Seminar-Intellectual Property Online (Continued) Cyrus Daftary & Todd Krieger February 11, 2013

2. Agenda • Administrative Discussion • Trademarks • Patents • Questions & Answers

3. Administrative Discussion Group Selection

4. Trademarks

5. 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

6. 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

7. 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))

8. Trademark Fair Use - registration does not confer absolute rights. Malted Barbie • 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 dilution). • Parody and commentary is protected by 1st Amendment (www.ballysucks.com). • Comparative advertising in encouraged in the U.S., but not worldwide. • Often restricted to category of goods and services. http://creativefreedomdefense.org/fc_1.htm

9. Trademarks Online • Domain names. • Meta-tags and key words. • Brand names mentioned within the site. • Attribution • Bait and switch • Words hidden within the site. Potential areas of controversy:

10. 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.

11. 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

12. 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, mensprada shoes, mensgucci shoes, mensprada sneakers, mensgucci shoes, gucci shoes for men, prada shoes, for men," /> • Search term example (www.ebay.com). • 130790192632

13. Common Domain Name Disputes: • 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.

14. 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

15. Domain Name Controversy (Cont.)

16. Solution • They acquire “Theclub.com.”

17. New Problem - Ever hear of Club Magazine? • Adult magazine “club” claims that the public associates the term with their magazine:

18. 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.

19. 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.

20. Many Domain Names are Still Valuable • http://www.businessinsider.com/the-10-most-expensive-domain-names-of-2012-2012-12

21. Online Trademark Lawsuit Toolbox • 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. Causes of Action:

22. 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

23. Trademark Cyberpiracy PreventionAnti-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

24. ICANN DisputeResolution 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/

25. 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.

26. 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?

27. Trademark Disputes • 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 Case discussion

28. College Source Case Discussion • Keywords and the likelihood of confusion

29. 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

30. 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.

31. 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 • Articles of Manufacture • Machines • Compositions of Matter • Processes Types of work protected: Not protected: • Ideas • Scientific Principals • Methods of doing business • Natural Substances

32. Requirements for a valid patent • Patentable subject matter • Novelty • Utility • Non-obviousness • Lots of capital

33. 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)

34. 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.

35. 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.

36. 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?

37. 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.

38. 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?

39. Patent Trolls • 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.

40. 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.

41. 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.

42. Questions & Answers