law 227: trademarks & unfair competition internet domain names july 16, 2009 jefferson scher

Law 227: Trademarks &Law 227: Trademarks &Unfair CompetitionUnfair Competition

Internet Domain NamesJuly 16, 2009

Jefferson Scher

TM & Unfair Comp — Day 13TM & Unfair Comp — Day 13AgendaAgenda

•Internet Domain NamesWhat are they, trademark registrationSpecial remedies for “cybersquatting”

Federal Anti-cybersquatting Consumer Protection Act (ACPA, Lanham Act §43(d))

Arbitration under the UDRPConsiderations in domain name deals

Trademarks in CyberspaceTrademarks in CyberspaceConceptualizing Virtual RealityConceptualizing Virtual Reality

•What analogies should we use for applying TM law to web sites?Brochures / promotional materialsMagazines or other protected speechBroadcast media (radio, television)Retail storesTheme parks

Trademarks in CyberspaceTrademarks in CyberspaceDomain NamesDomain Names

•The Domain Name System (DNS)A system for converting unique host

names into unique numeric addressesRoot 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

Trademarks in CyberspaceTrademarks in CyberspaceDomain Names — Registration as Domain Names — Registration as MarksMarks

•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/

Trademarks in CyberspaceTrademarks in CyberspaceDomain Names — ACPADomain 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


•Sample Bad Faith CasesSporty’s Farm v. Sportsman’s MarketLucas Nursery v. GrosseCoca-Cola v. Purdy

•Sample Safe Harbor CasesUtah Lighthouse Ministry v. FAIRVirtual Works v. Volkswagen


•Trafficking by non-ownersFord v. GreatDomains.comVulcan Golf v. Google

•In rem jurisdictionHarrods v. Sixty Internet Domain NamesCable News Network v. CNNewsHeathmont v. Technodome

Trademarks in CyberspaceTrademarks in CyberspaceDomain Names — Lanham Act/ACPADomain Names — Lanham Act/ACPA

•First Amendment CasesPlanned Parenthood v. BucciJews for Jesus v. BrodskyLamparello v. FalwellPETA v. Doughney

Trademarks in CyberspaceTrademarks in CyberspaceDomain Names — UDRPDomain Names — UDRP

•UDRP test for cybersquattingDomain 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


•Sample UDRP decisionsDial-A-Mattress v. MoakleyCompare: Phone number casesEstate of Frank Gorshin v. MartinFields for Senate v. ToddlesOrange Bowl Committee v. Front &

Center Tickets


•“Sucks” domainsDirect Line Group v. Purge I.T.So. Cal. Regional Rail Auth. v.

Arkow

•Reverse domain name hijackingDeutsche Welle v. DiamondWarePlan.net v. Yikilmaz


•Appeal: UDRP meets ACPASallen v. CorinthiansDluhos v. StrasbergBarcelona.com v. City of Barcelona

Trademarks in CyberspaceTrademarks in CyberspaceDomain Name AcquisitionsDomain Name Acquisitions

•Parallels with trademarksUnique text string identifying a point in

cyberspace, or family of related hostsArguably inherently “source” identifying,

even if the USPTO doesn’t see it that wayCan function as a mark if used as a mark

Like “trade dress” and nontraditional marks (such as sound and scent)


•Differences from trademarksOwnership not tied to use or registration“Name service” is:

What makes a domain name functionRevocable in the event of a TM challenge or

breach of contract by the registrantVulnerable to power outages, cracking, poor

service, and registrar’s financial collapse


•Key issuesAcquiring 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 TMAssurances of assistance in enforcing the

rights acquiredWillingness / ability to testify; credibility


•Key issues, cont’dRepresentations and warranties of

ownership and noninfringementAbility to indemnify buyerSeller’s non-use / non-registration of

similar domain names, trademarks, and business names in the future

Of course, price


•PricingBuyer’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


•Pricing, cont’dMarket factors

Buyer’s need/availability of alternativesSeller’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)


•Pricing, cont’dRole 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

Cost

Leverage


•Non-cash (in kind) considerationProducts of buyer

Computer hardware, software licenses, etc.Other

Joint promotion on buyer’s siteFree advertising on buyer’s siteInternet access/web hosting/e-mail under

the transferred domain or a subdomain


•Negotiation postures for buyerLegal (demand letter, UDRP, lawsuit)

Requires leverage for credibilityFactor in legal fees and costs

“Business” approaches:casual/friendly vs. strong

“Confidential” inquiry/purchase(through counsel or investigation firm)


•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 interestPinging IP owners who didn’t seek you out

may set you up for cybersquatting liability


•Agreement structures“Bill of Sale”-style short form

Just goods and consideration — and the goodwill if you want to acquire TM rights

Settlement Agreement styleDeal with the potential for future litigationTightly tie the seller’s hands“Friendly” agreement takes longer to draft


•Payment terms — favorable to buyerBest: after transfer; no payment if the

transfer fails due to no fault of buyerFallback: 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


•Terms the seller might preferPayment in advance, no refunds if

the transfer should fail for any reasonNo promises/warranties about

ownership or past use of the domainNo obligations to assist buyer in the

future with domain or TM issues


•More terms the seller might preferNo restrictions on future business or

domain names, or future marksLong 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


•Post-agreement logisticsIdiosyncratic 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 recordationPolicing future names and domains

TM & Unfair Comp — Up TM & Unfair Comp — Up NextNextTopics and Reading for Day 14Topics and Reading for Day 14

•Advertising IssuesCh. 8, pp. 556-568Ch. 6, pp. 417-433; Supp. pp. 46-49Ch. 6, pp. 370-394, Supp. pp. 42-46

•Review (student-driven)Your questions on specific topicsYour questions on past exams

law 227: trademarks & unfair competition internet domain names july 16, 2009 jefferson scher

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