Tuesday, November 29, 2011

Cybersquatters are Becoming Typosquatters

                The idea of Cybersquatting is not knew: a person grabs a domain name of a well-known trademark or brand (i.e. “Nike.com”) to sell to the trademark owner or otherwise use the name to attract consumers to their sites for one reason or another.  However, it appears that the Anti-Cybersquatting Act has done its job.  Now, Cybersquatters are becoming Typo Squatters by buying up domain names spelled similarly to “real” companies to take advantage of consumers who mis-type the domain name they are seeking.  Recently, the National Arbitration Forum dismissed a complaint against a Barbados businessman who purchased goggle.com, goggle.net, and goggle.org because it thought it lacked jurisdiction to hear the case.  Google brought the case to get the Barbados businessman to transfer the mis-spelled domain names to it.  Apparently, he used the sites to divert computer users to a survey promising a chance to win prizes.  The survey is a scam to obtain e-mail addresses and blitz those e-mail addresses with spam.  He gave out no prizes. 
                Apparently, typo squatting is becoming a huge headache for companies because it costs the companies of the 250 most-trafficked websites $ 285 million annually in lost sales and other expenses (ironically, those search engines who sell ad words or key word advertising would also benefit from the actions of the typo squatters).  This is according to a 2010 study conducted by FairWinds Partners.  FairWinds Partners is an internet consulting firm based in Washington D.C.  According to a Harvard Business School assistant professor, top websites can easily be targeted by over a thousand typo squatting domains.  Yes, typo squatting is not new, but it seems that the proliferation of online ad networks makes typo squatting profitable.  Typo squatting also allows any e-mails to the mis-spelled domain names to go to the owner of the mis-spelled domain.  This can have some serious implications if trade secrets or other confidential/private information.  In fact, a San Francisco information security group, recently conducted a study to determine how much and what type of information a typo squatter may receive by virtue of owning the mis-spelled domain.  The security firm set up phony domain names based on the 500 largest companies in the United States.  The study received more than 120,000 e-mails containing confidential employee user names, passwords, trade secrets, and in at least one case, an e-mail providing the configurations for the routers at one large firm (including passwords).  Obviously, this information can be used for corporate espionage. 
                So, how do you protect yourself against typo squatting? Well, the easiest way is the same way to protect against cybersquatting: register the domains yourself for your company.  That way, the mis-spelled domains are not available to the typo squatters.  What if you did not do that? Well, then there is always filing a complaint with the site, the ISP, ICANN, or in a court of law.  The basis of these complaints would be that the mis-spelled domains are infringing on your company’s trademarks by causing consumers to confuse your site with the typo squatters’ site.  A word of caution: while this may be true for mis-spelled domain names that have sites that may look similar to the trademark owner’s, I believe that it may not work for those sites which are obviously not affiliated with the trademark owner (e.g. the “goggle.com” example above where the typo squatter’s site is a survey).  The companies seeking to protect their trademarks seem to believe that people using the internet are not very smart in the ways of the internet.  I find that hard to believe.  Yes, there are people who succumb to internet scams, but it seems to me that given that the internet is such a huge part of most people’s daily lives, that internet users are becoming wiser to these so-called scams.  As I cited in my metatag blog posting, at least one court seems to agree with me that online consumers are not stupid nincompoops who cannot figure out that they landed at a site that they did not intend.  Consumers landing at a page with a survey when looking for Google’s search engine would easily recognize that the site is not “Google.com.” 
                Instead of focusing solely on consumer confusion, companies and the courts should focus on the key element to the Federal Anti-Cybersquatting Act: bad faith intent to profit from the mark.  Yes, consumer confusion is an element of trademark infringement, but it is only one of several elements and should not necessarily take precedence to the exclusion of the others.  It seems that there is little argument that someone registering a domain name that consists of a mis-spelled trademark and then uses the domain to scam consumers or otherwise profit from the mis-spelling of the trademark has done so in bad faith.  Now, please do not get confused, consumer confusion is still a mainstay of any action based on the Lanham Act (the Federal Trademark/False Advertising/Anti-Cybersquatting Act/Unfair Competition Act) and a company asserting any rights pursuant to the Lanham Act will need to show that there is a likelihood of consumer confusion.  But, I believe that the courts or factfinders cannot be so hard on consumers. 

Saturday, November 19, 2011

Pitbull Takes a Bite Out of Lohan

                So, apparently, Lindsay Lohan did not like Pitbull’s lyric: “got locked up like Lindsay Lohan.”  The lyric appears in Pitbull’s song, “Give Me Everything.”  Clearly, her legal bills must be mounting because she sued Pitbull in New York state court for royalties for the use of her name.  It is unclear why Ms. Lohan claims she is a resident and citizen of New York when she has been a guest of California prisons, is subject to probation in California, has been under house arrest in California, has been ordered to community service in California, and, according to documents filed by Pitbull, has been living in California since 2004.  Based on the foregoing, Pitbull wants to move the lawsuit to the federal courts in California.  Looks like he may have a good argument given the multitude of run-ins with the law Ms. Lohan has had recently—all in California.  Pitbull has set forth the multitude of run-ins with the law in his countersuit against Lohan.  [Insert Michael Buffer’s “Let’s Get Ready to Rumble” call here].  
                Lohan asserts that the lyric by Pitbull is defamatory.  The tort of defamation protects a person’s interest in his or her reputation or character.  In order to qualify as defamation, the statement made must be false.  Yes, you read that right, truth is a defense to defamation.  Hard to argue that Pitbull’s lyric is false when there is ample support in the public record detailing Lohan’s criminal exploits.  She has been incarcerated, she has been placed on house arrest, she is on probation, and she has most recently been admonished by a California State Court Judge for failing to participate in and complete her court-ordered community service.  Moreover, one must wonder what “reputation” Lohan is actually attempting to protect.  Her recent legal troubles do not lead to the conclusion that Lohan has a “good reputation.” 
                It appears clear that Lohan was both forum shopping (filing in New York) and was hoping to get a pay day from Pitbull. However, Pitbull is fighting back.  He is not being nice about it, either.  He may have the better argument for both moving the litigation to California and defending against Lohan’s defamation claim.  Stay tuned.   

Wednesday, November 16, 2011

Maple Syrup Like Wine??

                Vermont's Senators are introducing legislation making it a felony to label syrup as "Maple Syrup," when it is not genuine maple syrup.  The "Maple Agriculture Protection and Law Enforcement ("MAPLE") Act, should it pass, will make any resulting violation a trip to federal prison for up to five years.  Current law makes selling something that is not maple syrup as maple syrup a misdemeanor punishable up to a year behind bars.  Vermont is the leading producer of maple syrup, so it is no wonder that its Senators are trying to protect the State's product. 
                According to Senator Patrick Leahy, Vermont's maple syrup is "iconic" because it is "painstakingly produced, and prized across the nation."  Senator Leahy also believes that the legislation is necessary to protect Vermont's high quality, natural product.  Apparently, Senator Leahy drafted and introduced the legislation after the United States Food and Drug Administration found a Rhode Island man was selling cane sugar based syrup as maple syrup.  Undoubtedly, this Rhode Island man must have been depraved when he committed such blasphemy.  Unsurprisingly, the Senators from Main and New York join in sponsoring the MAPLE Act.  Both of these states also produce maple syrup. 
                The MAPLE Act is more of a truth in advertising/labeling act more than anything else.  While it may seem to be a harsh penalty, it really follows the example of the Lanham Act which makes it a felony to intentionally traffics counterfeit goods bearing the trademark(s) of another with a hefty fine and up to 10 years in prison for a first offense.  Next time you purchase syrup, check the label.  I certainly will.

Wednesday, November 9, 2011

The U.S. Copyright Office Advises Congress to Phase Out Statutory Licenses

                The United States Copyright Office ("CR Office") advises Congress regarding copyright issues.  Recently, the CR Office proposed phasing out the cable/satellite statutory licenses--an item which Hollywood wishes to repeal.  In 1976, Congress amended the Copyright Act.  As part of that amendment, Congress established a statutory compulsory license allowing cable/satellite operators to distribute broadcast television signals upon payment of the license fee to the Copyright Royalty Board.  This Board act in much the same way as ASCAP and BMI by allowing persons wishing to license certain works to pay the license to one entity rather than hunting down and paying each copyright owner to license that owner's portion of an entire work.  In return, the Copyright Royalty Board distributes the fees to the copyright owners (i.e. Hollywood studios, sports leagues, etc.). 
            The suggested change of eliminating the compulsory license will mean that cable/satellite providers would have to negotiate individually with each copyright holder.  In most instances there will be more than one copyright holder for an entire audio-visual work.  Each copyright holder will only own the copyright to a particular portion of the work (i.e. a movie's music score).  For example, for a song, there are usually two copyright holders:  the owner of the sound recording and the owner of the words and music to the song.  As you can imagine, this will undoubtedly increase the cost of cable/satellite programming which means, of course, the end users of cable/satellite services (the viewers) will ultimately pay more for those services.  Another by-product of implementation of this suggestion by the CR Office would be to increase copyright disputes.  After all, with so many rights holders for one work, missing getting permission from one of them would mean a headache for the cable/satellite companies.  Increases in disputes means an increase in operating costs for these companies. 
            The statutory license provision related to cable/satellite transmissions has been under attack by the CR Office for quite some time.  However, should Congress ever phase out this portion of the Copyright Act, it could mean that the copyright owners will be able to earn more for licensing their content, but that would mean the consumer will ultimately pay the price. 

Tuesday, November 1, 2011

Occupy Wall Street is a Hot Intellectual Property

                Three groups recently filed trademark applications for the term "Occupy Wall Street" with the United States Patent and Trademark Office ("USPTO").  Primarily, the three entities/parties seek to trademark the name for use on clothing items--although they are seeking to use the name on other types of merchandise.  Two leaders of the movement who handle the finances for the movement (Occupy Wall Street aka Friends of Liberty Park GA) ("OWS"), an Arizona-based company, Fer-Eng Investments, LLC ("Fer-Eng") and a New York individual (Diane Maresca) ("Maresca") all filed applications for trademark registration.  According to some accounts, Fer-Eng appears to be a shell corporation for a family trust.  Supposedly, the trustees of the family trust belong to the 1% that Occupy Wall Street movement targets. 
                Reading between the lines, it seems as if Fer-Eng Investments, LLC believe they found an opportunity to obtain and exploit an asset like the OCCUPY WALL STREET trademark.  It is unclear whether Maresca is in anyway affiliated with OWS or the Occupy Wall Street movement.  However, both the Fer-Eng and Maresca's applications are intent-to-use applications--meaning that neither of these applicants are actually using the trademark on its goods in interstate commerce.  Our trademark law gives precedence to those who are first to use the mark in interstate commerce.  Of course, trademark law hedges a bit by allowing a person to file a trademark application based on an intent to use the trademark in interstate commerce and using the filing date to establish priority over others who use or intend to use the mark at a later date.  An interesting plot twist is that the Maresca filed her intent-to-use application on October 18, 2011, while Fer-Eng and OWS filed their applications on October 24, 2011 with OWS' application being submitted about 50 minutes before Fer-Eng's.  OWS's application claims that it began using the mark in interstate commerce for at least some of its listed goods around September 17, 2001 and first used the mark anywhere on July 1, 2011.  It appears as if OWS will ultimately win this battle, but it will be an interesting battle to monitor. 
                With intellectual property becoming more valuable, it is no wonder that there will be several entities seeking to capitalize on such events.  See my earlier blog regarding the company essentially hijacking the San Francisco's Giants' trademark.  This is just another reminder that you should be more proactive and vigilant in protecting your intellectual property rights.  It is always a good idea to conduct an intellectual property audit on a regular basis to ensure that you are protecting all of your or your company's assets.