Intellectual Property Law

Chapter 7 Lecture Notes

Major points to be addressed in presenting the chapter materials include the following:

1. The Internet has become a channel of commerce through which companies offer their
goods and services. Not only are their marks displayed on their Web pages but these
companies also desire that their addresses for the Web, or domain names, identify
them and/or use their marks.

2. At present, domain names are registered on a first-come, first-served basis with
various registrars (all of whom are accredited by ICANN) who assign domain names
to applicants. Companies have often discovered that when they apply for a domain
name that includes their company name or mark (such as “ibm.com”), the name has
already been assigned or registered to another party.

3. To reduce disputes over domain names, the U.S. government created the Internet
Corporation for Assigned Names and Numbers (ICANN) in 1998 to oversee naming
policies. Registration of a domain name through one of the ICANN-accredited
registrars requires an applicant to represent that the applicant is not seeking to register
a domain name for an unlawful purpose and does not know of any infringement that
would result from such registration.

4. While allegations have been made that a registrar has a duty to screen domain name
applications for potential trademark infringement, courts have ruled that registrars
have no such duty to prevent infringement. Thus, there is a safe harbor for domain
name registrars unless they have a bad faith intent to profit from a wrongful
registration or maintenance of a domain name.

5. In 2013, ICANN accepted applications for new gTLDs, and as of the writing of this
text, had accepted more than 700 new gTLDs, including “.auto,” “.love,” and “.esq”.
Because of the addition of these new suffixes or “delegated strings,” some trademark
owners have incurred significant expense in both registering their names with these
new suffixes (to ensure cybersquatters don’t take these names) and in monitoring the
Internet to ensure their marks are not abused. To assist trademark owners, ICANN
established a Trademark Clearinghouse in which trademark owners may record their
rights so they can be notified when domains are registered that may infringe their
marks. Additional protection is provided to trademark owners through the “sunrise
period,” a 30-day period during which trademark owners may register their names in
a new gTLD before registration is open to the public at large. Thus, IBM could
register IBM.digital during the sunrise period.

6. Unscrupulous parties have often registered numerous domain names with the intent of
ransoming them back to their true owners, a practice called cybersquatting. The true
owner cannot bring an action for infringement because it often cannot show
likelihood of confusion. Moreover, it usually cannot show use in commerce (required
in an action for trademark infringement) because the cybersquatter simply registers
the rightful owner’s name but does not use it in commerce.

7. There are several approaches that can be taken by a victim of cybersquatting:

• An action can be brought under the Federal Trademark Dilution Act (however,
recent cases are beginning to suggest that the sole remedy for a victim of
cybersquatting should be pursued under the new Anticybersquatting Projection
Act rather than in an action for dilution);
• A traditional trademark infringement action can be brought (if confusing
similarity and use in commerce can be shown);
• A civil suit can be instituted under the Anticybersquatting Consumer Protection
Act; or
• An administrative proceeding can be instituted through ICANN’s dispute
resolution process, using its Uniform Domain Name Dispute Resolution Policy
(UDRP);
• An administrative proceeding can be instituted through ICANN’s new Uniform
Rapid Suspension System, applicable only to new gTLDs (those assigned after
2013).

8. The Anticybersquatting Consumer Protection Act (ACPA) is the world’s first law on
domain names and makes it illegal for a person to register, traffic in, or use a domain
name of another if the domain name is identical to or confusingly similar to the
trademark of another and the person has a bad faith intent to profit from the mark.
Bad faith intent to profit must be shown for a plaintiff to prevail under ACPA. ACPA
allows recovery if the wrongdoer either wrongfully used or registered another’s mark.
There is no requirement under ACPA that one have a registered mark to bring an
action for relief. Moreover, there is no requirement under ACPA that the
cybersquatter use a mark—using, registering, or trafficking in a mark with bad faith is
sufficient.

9. One who prevails under ACPA may be awarded injunctive relief, money damages,
attorneys’ fees, and profits.

10. ICANN adopted a Uniform Domain Name Dispute Resolution Policy (UDRP) to
resolve disputes relating to domain names. The UDRP is a quick and inexpensive
alternative to bringing a formal lawsuit under ACPA. Neither money damages nor
injunctive relief can be obtained under the UDRP; however, UDRP allows for
canceling a wrongful domain name or transferring it to its rightful owner and is thus
an excellent forum for cancellation or transfer of a domain name.

11. The UDRP also prohibits “reverse domain hijacking,” which occurs when a company
(usually, a larger company) attempts to threaten or intimidate a legitimate domain
owner into giving up its domain name to the larger company.

12. ICANN’s new Uniform Rapid Suspension System allows the owner of a registered
trademark to suspend another’s domain name (if the owner can show an identical or
confusingly similar domain, that the respondent has no legitimate right to use that
domain, the domain is registered and being used in bad faith, and the domain is one of
the new gTLDs or suffixes registered after 2013). No money damages may be
recovered, but the use of the wrongful domain name may be suspended.

13. Social media domain names (such as those used on Twitter and Facebook) have also
been pirated. Most service providers, such as Facebook, have implemented policies
for complainants and can cancel names that have been wrongfully registered.

14. The dilution doctrine has also been used to prevent acts of cybersquatting. Courts have
held that use of another party’s mark as a domain name decreases the true owner’s
ability to identify and distinguish its goods on the Internet. In some instances, use of a
mark as part of a domain name for unsavory goods/services has been held to be
tarnishment under the dilution doctrine. Some recent cases, however, have suggested
that ACPA should be the forum for all court cases involving cybersquatting and that the
dilution doctrine should not be used for cybersquatting cases.

15. In 2009, ICANN enacted new policies to reduce “domain tasting,” the practice of
registering numerous domain names, trying them out to see if they are profitable, and
then returning them within ICANN’s five-day grace period, at no cost. ICANN now
imposes fees on those who return names to ICANN above a certain threshold level.
These new policies have nearly eliminated domain tasting.

16. The United States planned to transfer control over ICANN from the United States to
an international group of stakeholders in 2014, but this plan was delayed in mid-2015.
17. Hyperlinking, the practice of allowing Internet users to click onto a symbol or mark
and be transported to a different page or website, is protected as free speech. It is
unknown whether deep linking is likewise protected (the practice of allowing a user
at one site to proceed directly to certain information at another site, bypassing the
home page at the second site). So long as there is no confusion of source, deep linking
by itself does not likely infringe another’s rights.

18. The issue of framing (the retrieval by one website of content from another site that is
incorporated into the original website within a frame, often obscuring advertisements
and content) is also unresolved. Some courts have suggested that because framing
captures content from another’s site, there is infringement.

19. One question that has arisen is whether by operating a website accessible in all U.S.
jurisdictions, a website owner is subject to the jurisdiction of the courts in each state
such that it can be sued in any state. Most cases have held that if a party merely posts
information or provides general information about its products/services, jurisdiction
cannot be exercised over a nonresident defendant. If, however, the defendant is
actively conducting business, entering into contracts, or selling goods over the
Internet into that state, jurisdiction can be exercised.

20. The use of marks in both visible forms and invisible metatags is also a much-litigated
issue. Generally, if another’s marks are being used as a fair use or merely to describe
a user (a nominative fair use) in an accurate fashion, they are permissible. Using
another’s trademark in a manner calculated to cause initial interest confusion may be
actionable. A 2011 Ninth Circuit case, however, held that a mark owner is required to
show likelihood of confusion and not mere diversion when presented with an initial
interest confusion question. Because most websites no longer use metatags, cases
involving such are waning.

21. The use of key word advertising has been alleged to constitute infringement. In key
word advertising, one party purchases “common” words from an Internet service
provider such as Google. When a consumer searches for that word, the purchaser’s
name is “pushed” to the top of the results page. However, the results page usually
also displays competitors’ marks. Courts considering this issue have remarked that
although such as is “use in commerce” (required to prevail in a trademark
infringement suit), a plaintiff must still prove likelihood of confusion. If the ads are
separate and clearly labeled, consumers are unlikely to be confused. Some courts
have analogized the case to supermarkets shelving one brand of goods next to
another—much the way Heinz products are displayed next to Hunt’s products.

22. Phishing (the act of using lures to “fish” for sensitive personal or financial
information) may constitute trademark infringement when another’s trademark is
used to cause confusion, deception, or mistake. Phishing may also be a violation of
ACPA and may constitute fraud, false advertising, and a violation of any relevant
state anti-phishing statutes.

23. Domain-name decisions, linking and framing decisions, and key word advertising,
pop-up advertising, and phishing decisions rely on well-established trademark
principles: If the defendant’s conduct constitutes use in commerce and is likely to
cause consumer confusion, trademark infringement may be found as readily in
cyberspace is in conventional settings.

24. The proliferation of use of marks and domains on the Internet adds another level of
complexity to a trademark owner’s duty to monitor and protect its marks. Thus, many
companies conduct annual audits of the Internet to ensure their marks are not being
infringed or engage the services of companies to review Internet uses to ensure their
names and marks are protected. Moreover, many trademark owners (and celebrities)
register domain names defensively—simply to ensure others do not do so. No court
has yet required a trademark owner to constantly scour the Internet to locate
offending trademark uses.

25. Sites set up by consumers to register complaints about companies and which use a
company’s name or mark have generally been held not to constitute infringement so
long as there is no likelihood of confusion. Moreover, such complaint sites do not
dilute the owner’s mark because the use is noncommercial consumer commentary. If,
however, the site is more than a “pure” gripe site and is used to offer a competitor’s
goods, or if the gripe site owner offers to sell the website to the target, such may be a
violation of ACPA. In any event, trademark law cannot be used to chill freedom of
expression.