46-840 ECOMMERCE LAW AND REGULATION SPRING 2002 © 2002 MICHAEL I. SHAMOS Lecture 6: Trademark and...

46-840 ECOMMERCE LAW AND REGULATION SPRING 2002 © 2002 MICHAEL

I. SHAMOS

Lecture 6:Trademark and Domain Names


I. SHAMOS

History of Trademarks

• Function: identify the source of goods and services– Protects consumers against fakes– Protects producers against unfair competition

• Ancient producer’s marks (Etruscan, Lake Bolsena)

• Medieval guilds• State trademark laws• Federal legislation 1870, 1876

– Declared unconstitutional 1879• Trademark Acts 1881, 1905, 1946 (Lanham Act)


I. SHAMOS

Trademark Concepts

• Trademark rights relate only to commercial activity. • Every company that interacts with the public has

trademarks.• “Goodwill” in trademark law = tendency of the public

to associate a trademark with a business.• “Distinctiveness” = tendency of a mark to be identified

with only 1 supplier in a “channel of trade”. More distinctive = better.

• We see hundreds of marks/day


I. SHAMOS

Confusion

• Public must not be confused, misled or deceived as to– source of goods or services– sponsorship– association– approval

• Trademark law is founded on preventing public confusion– Policing is done by trademark owners

• Tension: all merchants must be allowed to describe their goods


I. SHAMOS

What Is a Trademark?

“any word, name, symbol or deviceor any combination thereof, …used by a person …to identify and distinguish his or her goods, including a unique product, from those manufactured or sold by others andto indicate the source of the goods, even if that source is unknown.”

15 U.S.C. §1127

• Many products may use the same mark if no confusion results, e.g. “Cadillac”


I. SHAMOS

What Can Be a Trademark?

• Word: AT&T• Stylized writing

• Logo

• Combination• Slogan

– “The Right Choice” for “telecommunications services” in Class 38


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What Can Be a Trademark?

• Sound– “N-B-C”: a sequence of chime-like musical notes which are

in the key of C and sound the notes G, E, C, the G being the one just below middle C, the E the one just above middle C and the C being middle C, thereby to identify applicant’s broadcasting service

– Tarzan yell

• Aroma– But not for perfume!

• Color– Pink Owens-Corning Fiberglas® insulation


I. SHAMOS

Secondary Meaning

• Trademarks usually have more than one meaning• First (primary) meaning

– The literal words of the mark, e.g. “Apple” is a kind of fruit

• Second (secondary) meaning– Source indicator, e.g. “Apple” is a source of

computers• If a descriptive term has secondary meaning, it

functions as a trademark and can be protected.


I. SHAMOS

Spectrum of Distinctiveness

• Generic– The name for a product. E.g. “screwdriver” for hand tools.

No trademark rights.

• Descriptive– Describes a characteristic, property, quality or use of the

goods. E.g., “Crunchy Bites” for rice cakes. Need proof of secondary meaning.


I. SHAMOS

Spectrum of Distinctiveness

• Suggestive– Indicates but does not describe product, e.g. “Workmate” for

portable workbench; “Workmate” for tobacco. No secondary meaning needed for protection.

• Arbitrary– A real word, but no connection to product, e.g. “Apple” for

computers.

• Coined– A made-up word, e.g. “Xerox”, “Kodak”, “Lycos”. Strongest

possible TM protection.– “Kodak the Magician” case


I. SHAMOS

IP Designators

® Registered trademark

TM Claim of trademark rights

SM Service mark claim

Pat. Pend. Patent has been applied for

© Copyright notice

???P

TRADEMARKDESIGNATORS


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What is Trademark Infringement?

use in commerce of “any

reproduction, counterfeit, copy, or colorable imitation of a … mark

in connection with the sale, offering for sale, distribution, or advertising

of any goods or services on or in connection with which such use is likely to cause confusion, or to cause mistake, or to deceive”

15 U.S.C. §1114


I. SHAMOS

Forms of Trademark Infringement• “Actual confusion”

– Significant incidents in which a potential purchaser approached one source thinking it was another

• “Likelihood of confusion”

– Acts creating a substantial chance of actual confusion

– Likelihood is enough for a lawsuit

• “Palming off”, “passing off”

– A sells A’s product under B’s name

• “Reverse passing off”

– A sells B’s product under A’s name


I. SHAMOS

Some DuPont Factors(for likelihood of confusion)

• Similarity of marks– appearance, sound, connotation, “commercial impression”

• Similarity of established trade channels

• Conditions under which and buyers to whom sales are made, – impulse v. sophisticated purchasing

• Fame of the prior mark• Similar marks for similar goods• Actual confusion

– concurrent use without confusion?


I. SHAMOS

Trademark Dilution

• Dilution– Dilution of the distinctive quality of a “famous” mark– What’s famous? Depends on channel of commerce– “The owner of a famous mark [is] entitled ... to an

injunction against another person's commercial use ... of a mark or trade name, if such use begins after the mark has become famous and causes dilution of the distinctive quality of the mark”

15 U.S.C. §1125(c)• No competition required for dilution


I. SHAMOS

Choosing Trademarks

• ALWAYS a marketing decision + legal clearance• Marks have connotations and suggestive features

– Must be discussed explicitly• Brainstorming

– Define goals for the mark. e.g. “catchy”, “conveys strength”, “high-tech”

– Generate terms and fragments– Mix and match– Narrow down for legal clearance


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Trademark Searching

• Good news: trademark applications are public. • Bad news: must check all 50 states, DC and federal.• Bad news: registration is not required to obtain rights.• Terrible news: must search trade literature,

directories, Internet, news stories, ….• Good news: Intent-to-use applications


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Outline

• Trademarks and domain names– Registration– Cybersquatting– Typopiracy

• FTC Internet regulation• Statute of Frauds• Digital signatures• Clickwrap agreements


I. SHAMOS

Trademark

• Trademark: “any word, name, symbol or device, … used by a person … to identify and distinguish his or her goods … from those manufactured or sold by others” 15 U.S.C. § 1127

• Trademark / service mark– Identifies the source of goods and services

• Test for infringement is “likelihood of confusion” as to origin, sponsorship or association

• Many products may use the same mark if no confusion results, e.g. “Cadillac”


I. SHAMOS

Trademarks in Cyberspace

“The terms of the Lanham Act do not limit themselves in any way which would preclude application of federal trademark law to the Internet.” Cardservice International, Inc. v. McGee, 950 F.Supp. 737

(E.D. Va 1997)

(Case involved domain name cardservice.com)


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Domain Names as Trademarks

• Must function as a mark, not just a web address– must identify source of goods or services

• Must be distinctive, or not protectible– bank.com not protectible for banks– soft.com for facial tissues is merely descriptive– shamos.com is primarily merely a surname


I. SHAMOS

Internet Trademark Problems

• In the physical world: trademarks are seen in context, often alleviates confusion

• On the Internet, domain names may have no context, often creates confusion

• On the Internet, only ONE company can have cadillac.com

• Solution: worldwide domain name index

• Note: can apply for trademarks on-line with JPEGs! http://www.uspto.gov/teas/e-TEAS


I. SHAMOS

Cadillac Domains

• cadillac.org Cadillac, MI Chamber of Commerce

• cadillac.net MichWeb• cadillacs.com Wilson Web Works• cadillacs.net Will Tinney• cadillacs.org Matthew T. Smith• cadillaccar.com Try Harder & Co. (porno)• cadillaccars.com Burke Internet (squatter)• cadillac.co.kr UsedCar.com• cadillac.dk Danish car dealer• cadillac.de Cadillac Filmstheaters, Munich• cadillac.tv dotTV


I. SHAMOS

Trademark

• When is a domain name a trademark?– Domain name is the source

• In the physical world: trademarks are seen in context• On the Internet, domain names may have no context• Solution: worldwide domain name index

• Note: can apply for trademarks on-line with JPEGs! http://www.uspto.gov/teas/e-TEAS


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Assignment of Domain Names

• ICANN: Internet Corporation for Assigned Names and Numbers

• Formed 1998: International coalition of Internet interests“global, consensus-driven, non-profit organization”

• No statutory or government authority!• “Shared Registration System” (SRS)• Authorizes “registrars” to issue domain names

– 74 currently operational– 67 more accredited


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Uniform Dispute Resolution Policy (UDRP)

• Approved by ICANN• Complex procedure equivalent to arbitration• “Provider” (not ISP) = approved arbitrator• Parties: “Complainant,” “Respondent” (has the domain),

“Registrar” (organization that registered the domain)

• Complaint, then Response• Three-member panel is appointed• Language used = language of registration agreement• Usually no hearing• No administrative appeal• Does not oust jurisdiction of courts


I. SHAMOS

Cybersquatting

• Cybersquatting = registering, trafficking in, or using a domain name confusingly similar to a registered mark

• Anticybersquatting Consumer Protection Act,15 U.S.C. §1125(d) (Nov. 29, 1999)– Prohibits bad faith intent to profit from cybersquatting– in rem jurisdiction against a foreign cybersquatter or a

cybersquatter who has provided fictitious contact information

– action may be brought where the registrar or the registry is located.


I. SHAMOS

Cybersquattingporschecar.com, porschagirls.com, 928porsche.com, accessories4porsche.com, allporsche.com, beverlyhillsporsche.com, buyaporsche.com, calporsche.com, e-porsche.com, everythingporschie.com, formulaporsche.com, ianporsche.com, idoporsche.com, laporsche.com, myporsche.com, newporsche.com, parts4porsche.com, passion-porsche.com, porsche.net,porsche-911.com, porsche-944.com, porsche-autos.com,porsche-books.com, porsche-carrera.com, porsche-cars.com, porsche-classic.com, porsche-net.com, porsche-nl.com,porsche-online.com, porsche-rs.com, porsche-sales.com,porsche-service.com, porsche-supercup.com, porsche-web.com, porsche356.com, porsche4me.com, porsche4sale.com, porsche911.com, porsche911.net, porsche911.org, porsche911parts.com, porscheag.com, porscheaudiparts.com, porschebooks.com, porschecars.com, porschecarsales.com porschecasino.com, porschechat.com, porschedealer.com


I. SHAMOS

AntiCybersquatting Consumer Protection Act

• “A person shall be liable in a civil action by the owner of a mark ... if, without regard to the goods or services of the parties, that person-- (i) has a bad faith intent to profit from that mark … ; and (ii) registers, traffics in, or uses a domain name that -- in the case of a mark that is distinctive at the time of registration of the domain name, is identical or confusingly similar to that mark.”

• “In any civil action involving the registration, trafficking, or use of a domain name under this paragraph, a court may order the forfeiture or cancellation of the domain name or the transfer of the domain name to the owner of the mark.”

15 U.S.C. §1125(d) (1999)

• In rem action authorized in district where registrar is located


I. SHAMOS

Deep Linking

• Linking to web page of another beneath the home page– user does not necessarily know that the link is to a different

website• Is it copyright infringement?• Is it trademark infringement? Dilution?• Ebay, Inc. v. Bidder’s Edge, Inc., 100 F. Supp. 2d 1058

(N.D. Cal. 2000)– Bidder’s Edge site accumulates information about online auction– Requires numerous “hits” to eBay to assemble information and links to

eBay– Successful theory: trespass to chattels– Preliminary injunction issued


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Framing

• Showing the web page of another framed with one’s own border (usually with logo and banner advertising)

• Washington Post Co. v. Total News, Inc., No. 97 Civ. 1190 (PKL) (S.D.N.Y., filed Feb. 20, 1997). Settled.

• Issues:– deceptive?– likelihood of association? – dilution?– unfair? (using content of another to draw advertising viewers)– First Amendment freedom to link?– Trespass theory?

• More links


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Metatagging

• Placing hidden text in a web page (usually another party’s trademark) so that one’s own page will be retrieved when a search is done for the other party’s mark (cyberstuffing)

• Issues:– deceptive?– likelihood of association? – dilution?– unfair? (using content of another to draw advertising viewers)– First Amendment freedom to link?– Trespass theory?

• Only one defendant has ever won a metatagging case (on special facts): Playboy Enterprises, Inc. v. Terri Welles, Case 98-CV-0413-K (JFS) (S.D. Cal. 1998)


I. SHAMOS

Trademark Fair Use

• Use of a term that “is descriptive of and used fairly and in good faith only to describe the goods or services of such party, or their geographic origin”

15 U.S.C. 1115(b)

• Three-prong test for fair use:– Product or service must not be readily describable without

using the trademark– Only that portion of the trademark necessary to identify the

product must be used– Nothing in the use may suggest connection or endorsement by

the trademark ownerNew Kids on the Block v. News America Publishing, 971 F.2d 302 (9th Cir. 1991)


I. SHAMOS

Typopiracy

• Registering misspellings of domain names in the hope of tricking users who make typing errors

• www.chrysler.com www.chrsyler.com www.chrylser.com• www.procterandgamble.com www.proctorandgamble.com

• Is it trademark infringement? False advertising? Deceptive trade practice?


I. SHAMOS

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46-840 ECOMMERCE LAW AND REGULATION SPRING 2002 © 2002 MICHAEL I. SHAMOS Lecture 6: Trademark and...

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