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Law 227: Trademarks & Unfair Competition

Law 227: Trademarks & Unfair Competition. Internet Domain Names July 16, 2009 Jefferson Scher. TM & Unfair Comp — Day 13 Agenda. Internet Domain Names What are they, trademark registration Special remedies for “cybersquatting”

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Law 227: Trademarks & Unfair Competition

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  1. Law 227: Trademarks &Unfair Competition Internet Domain NamesJuly 16, 2009Jefferson Scher

  2. TM & Unfair Comp — Day 13Agenda • Internet Domain Names • What are they, trademark registration • Special remedies for “cybersquatting” • Federal Anti-cybersquatting Consumer Protection Act (ACPA, Lanham Act §43(d)) • Arbitration under the UDRP • Considerations in domain name deals

  3. Trademarks in CyberspaceConceptualizing Virtual Reality • What analogies should we use for applying TM law to web sites? • Brochures / promotional materials • Magazines or other protected speech • Broadcast media (radio, television) • Retail stores • Theme parks

  4. Trademarks in CyberspaceDomain Names • The Domain Name System (DNS) • A system for converting unique host names into unique numeric addresses • Root servers contain entries for the Top Level Domains (TLDs) such as .com, indicating the server to ask for the address of the Second Level Domain (SLD), and so on, and so on Yahoo example

  5. Trademarks in CyberspaceDomain Names — Registration as Marks • What part(s) of a web address could be protectable in these examples? • http://www.nytimes.com/ • http://www.pets.com/ • http://geoclock.home.att.net/ • www.geocities.com/scrumpyshangout • Does it depend on other usage? http://www.pets.com/

  6. Trademarks in CyberspaceDomain Names — ACPA • Elements under §43(d) • Defendant registers, traffics in, or uses a domain name identical or confusingly similar to (or dilutive of) a mark distinctive (famous) at the time the domain was registered — regardless of goods; and • Defendant has a bad faith intent to profit from the mark

  7. Trademarks in CyberspaceDomain Names — ACPA • Sample Bad Faith Cases • Sporty’s Farm v. Sportsman’s Market • Lucas Nursery v. Grosse • Coca-Cola v. Purdy • Sample Safe Harbor Cases • Utah Lighthouse Ministry v. FAIR • Virtual Works v. Volkswagen

  8. Trademarks in CyberspaceDomain Names — ACPA • Trafficking by non-owners • Ford v. GreatDomains.com • Vulcan Golf v. Google • In rem jurisdiction • Harrods v. Sixty Internet Domain Names • Cable News Network v. CNNews • Heathmont v. Technodome

  9. Trademarks in CyberspaceDomain Names — Lanham Act/ACPA • First Amendment Cases • Planned Parenthood v. Bucci • Jews for Jesus v. Brodsky • Lamparello v. Falwell • PETA v. Doughney

  10. Trademarks in CyberspaceDomain Names — UDRP • UDRP test for cybersquatting • Domain name is identical or confusingly similar to complainant’s mark; • Domain holder has no rights or legitimate interests in the domain name; • The domain name has been registered and is being used in bad faith. • Mark owner has burden of proof on all 3

  11. Trademarks in CyberspaceDomain Names — UDRP • Sample UDRP decisions • Dial-A-Mattress v. Moakley • Compare: Phone number cases • Estate of Frank Gorshin v. Martin • Fields for Senate v. Toddles • Orange Bowl Committee v. Front & Center Tickets

  12. Trademarks in CyberspaceDomain Names — UDRP • “Sucks” domains • Direct Line Group v. Purge I.T. • So. Cal. Regional Rail Auth. v. Arkow • Reverse domain name hijacking • Deutsche Welle v. DiamondWare • Plan.net v. Yikilmaz

  13. Trademarks in CyberspaceDomain Names — UDRP • Appeal: UDRP meets ACPA • Sallen v. Corinthians • Dluhos v. Strasberg • Barcelona.com v. City of Barcelona

  14. Trademarks in CyberspaceDomain Name Acquisitions • Parallels with trademarks • Unique text string identifying a point in cyberspace, or family of related hosts • Arguably inherently “source” identifying, even if the USPTO doesn’t see it that way • Can function as a mark if used as a mark • Like “trade dress” and nontraditional marks (such as sound and scent)

  15. Trademarks in CyberspaceDomain Name Acquisitions • Differences from trademarks • Ownership not tied to use or registration • “Name service” is: • What makes a domain name function • Revocable in the event of a TM challenge or breach of contract by the registrant • Vulnerable to power outages, cracking, poor service, and registrar’s financial collapse

  16. Trademarks in CyberspaceDomain Name Acquisitions • Key issues • Acquiring TM rights in the domain • Whether / how to reference goodwill in the domain name (as though it were a mark) • Documentary evidence of “use” as a TM • Assurances of assistance in enforcing the rights acquired • Willingness / ability to testify; credibility

  17. Trademarks in CyberspaceDomain Name Acquisitions • Key issues, cont’d • Representations and warranties of ownership and noninfringement • Ability to indemnify buyer • Seller’s non-use / non-registration of similar domain names, trademarks, and business names in the future • Of course, price

  18. Trademarks in CyberspaceDomain Name Acquisitions • Pricing • Buyer’s side — setting priorities • Getting the right price vs. getting it right now (or at at all) • Acquiring “trademark” rights vs. just a domain name • Airtight agreement vs. quick ’n dirty

  19. Trademarks in CyberspaceDomain Name Acquisitions • Pricing, cont’d • Market factors • Buyer’s need/availability of alternatives • Seller’s investment/sophistication • (Likely) Interest of others • General interest: value at auction to the public at large (inherent attractiveness of the name) • Special interest: similarity to names and mark used by others (brand extension value)

  20. Cost Leverage Trademarks in CyberspaceDomain Name Acquisitions • Pricing, cont’d • Role of legal leverage • Likelihood of success • Using UDRP, potential speedy transfer • In court, potential monetary remedies • Ability to impose process costs • Need to hire attorney, respond to discovery • Willingness to follow through

  21. Trademarks in CyberspaceDomain Name Acquisitions • Non-cash (in kind) consideration • Products of buyer • Computer hardware, software licenses, etc. • Other • Joint promotion on buyer’s site • Free advertising on buyer’s site • Internet access/web hosting/e-mail under the transferred domain or a subdomain

  22. Trademarks in CyberspaceDomain Name Acquisitions • Negotiation postures for buyer • Legal (demand letter, UDRP, lawsuit) • Requires leverage for credibility • Factor in legal fees and costs • “Business” approaches:casual/friendly vs. strong • “Confidential” inquiry/purchase(through counsel or investigation firm)

  23. Trademarks in CyberspaceDomain Name Acquisitions • What if you want to sell? Hmmm… • Auction/resale sites • Easy to use, but • Public might not place a high value on the name • Potential buyers might be nervous re TM rights • Targeting those with special interest • Pinging IP owners who didn’t seek you out may set you up for cybersquatting liability

  24. Trademarks in CyberspaceDomain Name Acquisitions • Agreement structures • “Bill of Sale”-style short form • Just goods and consideration — and the goodwill if you want to acquire TM rights • Settlement Agreement style • Deal with the potential for future litigation • Tightly tie the seller’s hands • “Friendly” agreement takes longer to draft

  25. Trademarks in CyberspaceDomain Name Acquisitions • Payment terms — favorable to buyer • Best: after transfer; no payment if the transfer fails due to no fault of buyer • Fallback: funds held in trusted “escrow” pending the transfer; no payment if the transfer fails due to no fault of buyer • Worst: payment in advance, refunded if the transfer fails for any reason

  26. Trademarks in CyberspaceDomain Name Acquisitions • Terms the seller might prefer • Payment in advance, no refunds if the transfer should fail for any reason • No promises/warranties about ownership or past use of the domain • No obligations to assist buyer in the future with domain or TM issues

  27. Trademarks in CyberspaceDomain Name Acquisitions • More terms the seller might prefer • No restrictions on future business or domain names, or future marks • Long term e-mail forwarding (under NDA), and a link on buyer’s web site to seller’s new location • Full release of trademark claims, and indemnification for buyer’s future use

  28. Trademarks in CyberspaceDomain Name Acquisitions • Post-agreement logistics • Idiosyncratic registrar procedures • At one extreme: notarized signatures and photocopies of picture IDs • At the other: online transfer with a password (and/or telephone confirmation) • Trademark assignment recordation • Policing future names and domains

  29. TM & Unfair Comp — Up NextTopics and Reading for Day 14 • Advertising Issues • Ch. 8, pp. 556-568 • Ch. 6, pp. 417-433; Supp. pp. 46-49 • Ch. 6, pp. 370-394, Supp. pp. 42-46 • Review (student-driven) • Your questions on specific topics • Your questions on past exams

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