Internet Commerce Outline introduction internet business models

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Spring 2006

Internet Commerce Professor Radin



Internet Commerce Outline

INTRODUCTION


  1. Internet business models  See Michael Rappa on digitalenterprise.org

    1. purely on the internet, entirely implemented on the internet

    2. Hybrid  Lands End – selling hard goods through online medium

    3. Digital goods vs. hard goods  ITunes/software/online publication vs. things you have to ship (books)

    4. Types of business models

      1. Merchant Business models

        1. Amazon

        2. Lands End (pioneer is transferring to web

        3. manufacturer direct sales (Dell)

      2. Advertising business model Google, Portal websites, Match.com or swinger websites

      3. Subscription  pay to use services, may overlap with merchant model  Salon.com, NetFliks, Wall Street Journal, New York Times, Pornography

      4. Brokerage  selling other people’s products on commission. A lot of brokers have been put out of business by websites; trading websites  day traders

      5. Affiliates  Try to pass onto friends and get points for it

      6. Internet gambling

      7. Demographic data  info-mediary

    5. network effects facilitates success; Importance of Branding



  1. 2 positions on Internet regulation (2 positions)

    1. Cyber utopians or cyber-anarchists can’t regulate; internet is global, nations are sovereign, etc
    2. Just another issues of conflict of laws; we’ve been dealing with this since the telegraph


      1. Top-down Global Issues regulation is usually top –down

      2. Bottom up network “code”  architecture, use TPMs (technological protection measures)

      3. Hybrid organization that regulates the domain name



TRADEMARKS

  1. Definition: a word, name, symbol or device that identifies goods in commerce, which owners may use exclusively in commerce.

    1. Purposes: to protect consumers from confusion & to protect owner’s investments.

    2. Trademark law is generally geographically fragmented—different people can use the same trademark in different places. Internet is changing this.




  1. To qualify for trademark protection, a mark must be:

    1. Distinctive

      1. Inherently distinctive: arbitrary (APPLE for computers), fanciful (EXXON) (not a real word), or suggestive (THE MONEY STORE; EVERREADY)

      2. Acquired distinctiveness: becomes distinct in the market

      3. Cannot protect generic terms (APPLE for apples), even if they were once distinctive (ASPIRIN) (“generecide”);

      4. Some trademarks become generic; fear of Xerox, Google, Kleenex, Teflon; must diversify

      5. Start-up companies: (i) make a good-faith search – but problem of non-registered marks and (ii) find a an arbitrary name

    2. Used in Commerce

    3. Affixed or otherwise associated with goods or services  NO NAKED TM Protection
    4. Signify the source or origin of the goods and services with which it is associated.


    5. Trade dress, packaging protection




  1. Registration.

    1. Application  Use-based, Intent-to-use – TM Revision Act 1988

    2. Statutory bars

      1. Immoral, deceptive or scandalous

      2. Insignia of the US

      3. Name portrait or signature of a living person w/o consent

      4. Word, name or other designation which is confusingly similar

      5. Descriptive

      6. Generic or functional items

    3. Exception to the statutory bar – Section 1052(f). Surnames who acquired secondary meaning

    4. Opposition

    5. Advantages of registration

      1. §1115(a) à prima fascia evidence of a valid trade mark and ownership

      2. Federal Jurisdiction

      3. Constructive notice

      4. basis for registration in foreign countries

      5. Registering with Customs

      6. use of symbol ®




    1. Register

      1. Principal

      2. Supplemental  If don’t qualify for Principal Register, may be registered on Supplemental, if mark is capable of acquiring secondary meaning.

    2. Geographical and market segmentation  same mark may be used in for different things in different markets and/or areas

      1. By Industry - Apple Bank, Apple Computers, Apple Records, Apple Insurance. Multi-part balancing tests about expanding into different industries

      2. By Geography  Pizzaz Coffee Shop in NY, and Pizzaz in New York

        1. Prior User exceptions to what national registration will cover
      3. Will geography become irrelevant because of the internet?





  1. Traditional Trademark infringement: Senior user of a mark sues that junior user of a mark claiming consumer confusion: source/origin of the products, affiliation/sponsorship between the two companies.

    1. Must prove: valid trademark, likelihood of confusion:

    2. Likelihood of confusion test considers (Polaroid test):

      1. Strength of trademark

      2. Similarity of marks

      3. Similarity of goods

      4. Channels of trade

      5. Sophistication of consumers

      6. Actual confusion

      7. Wrongful intent

      8. Whether the challenged use is within the senior user’s zone of natural expansion  important factor

    3. Passing Off  Pretending ∆’s goods are really made by Π.

    4. Reverse Passing Off – when D sells P’s goods, representing their source as from D (plagiarism-ish). Test for passing off varies from “bodily appropriation” to mere “consumer confusion” depending on the Circuit

    5. Continued use of traditional interpretationPlayboy v. Tel-a-talk  Adult-sex.com Offers subscription called “Playboys Private Connection”, hyperlink to playboy.com, Email address  playboy@adult-sex. Court found infringement for use of playboy name, and link to playboy might make people think there’s an affiliation.

    6. Internet Related Changes:

      1. also consider whether the defendant uses the internet for commercial purposes
      2. Two most important points are now similarity of marks and simultaneous use. (Planned Parenthood v. Bucci, S.D.N.Y., plannedparenthood.com is actually anti-abortion; Goto.com v. Disney, 9th Cir., Δ used a stoplight sign similar to Π’s)





      1. Initial Interest Confusion  much more important in internet context

        1. Permits a finding of a likelihood of confusion even if there is only a bit of confusion if consumer decides to purchase the goods from compeititor (Brookfield v. West Coast, consumers intending to get to Π’s site but got to Δ’s first because of Δ’s use of the domain name and metatags)

        2. But, most cases require that the companies be directly competing. If two parties are not competing, there can be no interest confusion (Bihari v. Gross, bad interior designer, Δ’s use of Π’s trademark in his metatags OK because he was not competing with her, she has no website).

    1. Brookfield communications v. West Coast Entertainment Corp (9th Cir. 1999)  Brookfield has “Moviebuff” TM for computer software with database; West Coast Video had TMs with moviebuff in them. Court found initial interest confusion when West coast used moviebuff (w/o space) in its metatags

      1. Initial Interest Confusion”  p. 85, diversion of consumer’s initial interest.  Divert people looking for Brookfield to West Coast; trades on Brookfield’s goodwill

      2. Billboard analogy Like posting a sign w/ competitor’s TM in front of your store. Say blockbuster posted a sign saying “West Coast Video” exit 7. In reality, there’s a Blockbuster there. Criticisms (See Playboy concurrence):

        1. No misdirection: It doesn’t say get off here and show ∆; shows you how to get to both
        2. No transaction costs of switching: on internet, it’s quicker to get another wesite. you just click “back”  it’s not like you just pulled off the highway


    2. Playboy v. Netscape By Keying advertisments, to Playboy TM, netscape is profiting from PEI TM by selling placement of banner ads keyed to searches for “playboy,” etc.

      1. Majority  will be OK by putting in disclaimers

      2. Concurrence  this doesn’t fit with Brookfield’s initial interest confusion




    1. 1-800 Conatacts vs. WhenU.com Users Downloaded software that gives you a pop-up ad. WhenU has directory of words, and sellsl advertisers right to be associated with these words

      1. “Internal utilization of TM in way that does not communicate it to the public is analogous to individual’s private thoughts about a TM”

      2. Holding: WhenU’s pop-up ads don’t display trademark. They aren’t selling specific terms; they do matching of terms to ads themselves.

    2. Legislative alternatives Utah anti-spyware Act (p. 114, n.2)

      1. Illegal to have triggering mechanism that displays an ad partially or wholly covering paid advertising or other content on internet website

      2. NOTE: 1-800 contacts was heavily lobbying the act

      3. Utah court issued preliminary injunction against enforcement based on dormant commerce clause WhenU vs. Utah




    1. GEICO v. Google Google is selling right to show a sponsored link if you enter a company’s trademark

      1. Case not dismissed  Google is actually selling the mark to competitors; Sale of search term could falsely imply a relationship
      2. At trial GEICO failed to show any likelihood that a Google user would be confused by sponsored links displayed in response to user’s search on GEICO’s TM term



  1. Trademark Dilution: The lessening of the capacity of a mark to identify and distinguish good or services regardless whether consumer confusion exists. Dilution is all about TM preservations, NOT about the consumer.

    1. State Law Dilution

      1. Blurring à Typically Π has very strong marks, and ∆ uses the same or highly similar mark on different goods or services. Blurs the distinctiveness of a mark by trying to disconnect association between product and source. Based on property law (value of association). Factors include:

        1. Similarity of the marks

        2. Similarity of the products covered by the marks

        3. Sophistication of consumers

        4. Predatory intent

        5. Renown of the senior TM

        6. Renown of the junior TM




      1. Tarnishment (Disparagement) à Creates negative image of TM through an association with unsavory, unrelated goods. No need to show confusion. May be a way to prevent people from parodying your stuff! (Debbie does Dallas, Enjoy Cocaine).




    1. Federal TM Dilution Act 1995 – created §43(c) of the Lanham Act

      1. Requirements -- Owner of a famous TM can enjoin another’s commercial use if:

        1. Famous TM

        2. Use causes dilution to the distinctive quality of the mark (actual harm)

      2. Famous” factors -- §43(c)(1)

        1. Degree of inherent distinctiveness
        2. Duration and extent of use of TM in connection with goods/services


        3. The duration and extent of advertising and publicity

        4. Geographical extent of the trading area

        5. Channels for trade used

        6. The degree of recognition of the TM in the channels of trade

        7. Nature and extent of use of similar TM’s by 3rd parties

        8. Whether the TM was federally registered

NOTE: can bring state dilution claims against non-federally registered TM

      1. Penalties: Injunction subject to equity and commercial reasonableness, Willfulness as a factor

      2. 125(c)(4) 4)  dilution defensesdefenses (ends up including “sucks” websites)

        1. fair use

        2. noncommercial use

        3. news reporting and news commentary




    1. Dilution on the internet - Don’t have to show actual confusion, jus blurring and Tarnishment

      1. Topin invented new form of dilution: “dilution by cybersquatting”

      2. ACPA made cybersquatting illegal in itself

      3. Dilution claim is not longer so important; instead it’s Cybersquatting as it applies to domain names

    2. Fame

      1. does not require that a trademark be a household name/nationally recognizable Hasbro v. Internet Entertainment Group, Candyland mark is famous since 95% of mothers with small children know it, Δ cannot use mark as its porn site URL; Teletech v. Tele-Tech, Π’s mark is famous in a Niche market, Δ cannot use it as its URL
      2. Conflict as to whether dilution covers famous marks that are not inherently distinctive


      3. 2nd Circuit in TCPIP v. Harr/7th Circuit

      4. 9th Cir has narrower view of famousness




    1. Selling a domain name qualifies as a commercial use under the dilution act (Panavision v. Toeppen)

    2. Avery Dennison v. Sumptonrequirement of significant use: ∆ acquired a bunch of .net domains corresponding to surnames, including avery.net and dennison.net. Avery-Dennison objected – already had .com domain names

      1. no confusion, so went for dilution

      2. District court was sympathetic to plaintiffs; thought there was bad faith

      3. Court of appeals holds for Sumption




    1. Moseley v. V Secret Catalogue USSC requires showing of actual dilution

      1. Statute says “causes dilution of distinctive quality”

      2. Backlash  Statutes afoot to reverse this case.

      3. 2nd Circuit interpreted court to believe that identical mark is per se dilutive, but if it’s not identical, need to show real harm



  1. First Amendment Concerns:

    1. “Use of another entity’s mark is entitled to First Amendment protection when his use of that mark is part of a communicative message, not when

    1. Traditional test  p. 73  10 factors



  1. Defenses:

    1. TM is invalid

      1. Merely descriptive, not distinctive yet

      2. Generic  includes “genericide” (Xerox, Asprin)

      3. Merely functional


    2. Not infringing (fair use)

      1. Not TM use

      2. Not in commerce

      3. No likelihood of confusion

    3. Dilution defenses

      1. Not famous

      2. Not commercial

      3. No actual dilution

    4. Affirmative defenses

      1. Fair use

      2. Nominative use

      3. First amendment

    5. GenerictyAssociation between goods and category. Look to see if the primary significance of the TM to the public is the common name of the product or service. Does everyone need to use the word to compete?

      1. Factors:

        1. Competitor’s use of the mark

        2. Plaintiff’s use of the mark

        3. Dictionary definitions

        4. Media usage

        5. Testimony or persons in the trade

        6. Consumer surveys à Look at how many people identify TM vs. how many of those folks can identify the source (or at least know that it’s from one source)

      2. A finding of genericty isn’t necessarily the end of the line. Might still have a passing off claim! May be subject to labeling remedies.

      3. Trademark holders cannot prevent internet search engines from linking advertisements to searches on particular terms that are words in the English language and not simply a trademark, especially when others beside the Π have trademarks involving a set of words (Playboy v. Netscape, Π cannot stop Δ from matching advertisers when users search the terms “playmate” or “playboy” because those terms do not refer exclusively to Π’s product).



    1. Abandonment §1127Mark is assumed abandoned if not use for 3 years.


      1. Discontinued Use – with no intent to resume. 3 year hiatus = prima facie abandonment. TM holder can rebut presumption by offering evidence of intent to resume.




    1. Loss of Distinctiveness – protects public because it assures that marks send consistent messages

      1. Naked Licensing (without goodwill attached) à License TM without adequate supervision no assurances that product/services will retain original characteristics, and risk consumer confusion. To protect against this, assignor must make routine inspections or have some other quality control system in place. Dawn Donut.

        1. Policy à consumer will benefit by lower pricing.




    1. First Sale Doctrine à Authorized initial sale exhausts right to maintain control over resale, and thus exhausts protections of the Lanham Act. Origin has not changed, and customers should not be confused.



  1. Fair use / Nominative Use – use of a mark that is used fairly and in good faith only to describe the goods or services of the owner of the mark. Often found in Parody, Comparative Advertisement, etc.

    1. Nomative Use identifies self by having to talk to TM

    2. Fair Use is comparing self to TM product.

    3. Bottom Line for protection of website: disclaimer, comparisons, good faith use, non-commercial

    4. The 3 Factor Test - § 1115(b)(4) . ∆ must prove

        1. Used in non-TM capacity

        2. Descriptive of goods or services

        3. Fairly and in good faith only

    5. The NKOTB Nominative Use Test:


      1. Product service not readily identifiable w/o naming TM

      2. use only as much as reasonably necessary to ID good/service

      3. can’t do anything that would suggest affiliation/sponsorship endorsement

      4. FACTS of that case: Newspaper contest for favorite boy band. Court said allowed to mention NKOTB, even though they’re using it to sell papers

    6. First Amendment Issues NKOTB has 1st Amend issues; commercial vs. non-commercial use




    1. Fair Use Under Dilution Claims: Nominative use does not per se dilute trademarks and may constitutes a fair use

    2. West Coast Entertainment: Moviebuff without a space is NOT fair use; Movie buff would be OK. Metatags were not fair use, but banner was. ∆ attracted people to its website for economic benefit.

    3. Bihari v. Gross: ∆ puts up gripe site to criticize ∆’s interior business. Fair use because Δ could not have described his website without using Π’s name.

      1. Distinctions:

        1. good faith  indicated by disclaimer

        2. comparison

        3. non-commercial  Bihari is a protest website

        4. Gross discusses Bihari floors, but West Coast doesn’t discuss moviebuff



    1. Playboy v. Welles (Terri Welles, PMOY) – Can use TM simply to ID as long as no implication of sponsorship. Welles’ use of PEI’s TMs were all nominative uses (Except for use of PEI’s mark in the wallpaper of her site). Should would be unable to ID herself as a past “Playmate of the Year” if she couldn’t use the phrase. Simply descriptive of past sponsorship, not current. And she had a disclaimer on there. Nominative uses do not dilute.


      1. Different from NKOTB in that Welles was describing herself as TM, newspaper was not

    2. Policy Issue contracting around fair use Rights Could Playboy contract with its Playmates to not identify themselves, or to use trademarks (but still allow some description), etc.? Make it look most like a one on one transaction, instead of right against the world.


Domain Names (subset of TM)


  1. Basics

    1. Registering

      1. InterNIC  company contracted to govern domain name system

      2. NSI  Netsol had rights and had internic running things

    2. ICANN  international body, experiment in governance.

      1. Weak and nebulous ties to US. Accused of being US dominated

      2. If experiment fails, telecoms are set to take it over

      3. Controls internet’s technical infrastructure root file in charge of internet for certain TDLs (.com, .net, .org)

      4. Adhesion contracts for top level domains

        1. Registrars have to give contracts to registrants

          1. Registrar Accrediation Agreement Contract on p. 277

          2. Verisign Service Agreement (p. 279)

        2. If you want to be in the system, you need to agree to this




    1. Registrars and Registries

      1. Registrant  person who registers second-level domain name

      2. Registrar  grants registrant right to sue SLD. Must impose certain contracts on registrants

      3. ICANN’s UDRP (must follow to get on internet)

        1. promise not to spam
        2. submit to jurisdiction of courts and ICANN


        3. guidelines for administrative proceedings

    2. Private governance to a certain extent it’s all governed by contract

    3. Harms of taking a URL w/ TM

      1. Increased consumer search costs

      2. Consumer confusion

      3. Efficiency losses (diminished capacity of TM

      4. Harm to companies identified by TM




  1. Free speech and Domain names

    1. Name.Space, Inc. v. Network Solutions, inc.  Name.Space wants NSI to authorize TLDs that are last names, e.g. .kaplan, or .kaplanformayor, but NSI won’t do it

      1. Π complains that this is a violation of first amendment

      2. Court: First Amendment doesn’t infiltrate here existing TLDs are not expressive, BUT not foreclosing possibility of DNS becoming expressive; Cites Bucci

      3. NOTE:used to be that NSI was only registrar,




    1. Planned Parenthood v. Bucci  anti-abortion activist registers www.planedparenthood.com to do protest, ∆ claims first amendment

      1. Court: more analogous to source identifier than communicative message. DNS not in 1st amend territory here

      2. If Bucci registered plannedparenthoodsucks.com, would the case have come out the other way? Probably yes after Taubman




    1. .sucks sites
      1. Taubman v. Webfeats ∆ registers shopsatwillbend.com and taubmaksucks.com. Π (who owns The Shops at Willow Bend) sues for dilution. Court ruled that website was no commercial, and there wsa not likely to confuse.


      2. Notes on Sucks sites

        1. ICANN policy is Less solicitous of “sucks” cites

        2. US courts are more protective

      3. What can the real company do?

        1. buy it?

        2. link to it and say you like free expression?




  1. Linking and framing

    1. No cases in book  all cases brought and settled

    2. Could owner bring action against people for linking?

    3. What about “deep linking” to page w/in cite that is not front page?

    4. Could you protect by putting up disclaimer?

    5. There are people who put signs on website saying that you disallow linking, and you have to agree to terms

    6. What about “framing”  your website has some other website around it?

  2. Cybersquatting problem

    1. Speculators

      1. Generic name speculation (cars.com, café.com, sex.com, etc.)

      2. Speculation on business names (eddiebaur.com, )

      3. Labeling people “cyber-squatters” in effect decided the question

    2. Toeppen v. Panavision Toeppen was registering various domain names, including Panavision.com with.arial pictures of Pana, IL

      1. Personal jurisdiction  ∆ was in IL, and Π was in CA; 9th Cir grants jurisdiction under “effects doctrine”

      2. Case expanded dilution beyond tarnishment and blurring

        1. domain name is a valuable corporate asset

        2. domain name identifies entity that owns the website
        3. puts reputation at website owner’s mercy (p. 186)  could be associated with unimaginable amount of messages


      3. Commercial use  Offering domain name for sale is a commercial use; Preventing panavision’s own commercial use

      4. Naked TM problem: Doesn’t matter that he didn’t attach the use to a product

      5. McCarthy (p. 200)  “poor fit between actions of cybersquatter and dilution law”

    3. offering to sell domain name identical to TM is commercial use, but mere registration has never been held to be commercial use




    1. Reverse Domain Name Hijacking  somebody tries to take domain name from somebody who does have a right to it (e.g., Amazon bookstore)




    1. Protest Site Cases

      1. PETA case (4th Cir)  People Eating Tasty Animals registering peta.org was violation.

      2. Bosley Medical Institute v. Kremer Kremer doesn’t like services he gets, sets up website criticizing them at bosleymedical.com (hair replacement case  “baldfaced effort to get even”)

        1. Consumer commentary for non-commercial use does NOT constitute infringement

        2. Court disagrees with 4th Circuit

        3. dangers Lanham Act was designed to address are not at play: not misleading consumers about source, not capitalizing on goodwill

        4. no commercial links

        5. Harm is in parody, not in diluting distinctive impact of TM

        6. Footnote 2  not official at odds with Panavision, but in tension;



    1. Ty, Inc. v. Perryman Bargainbeanies.com: selling second-hand beanie babies (“the aftermarket”), but also selling other stuffed toys; Ty sues for dilution; Website had disclaimer saying not affiliated with TM owner


      1. Court reverses summary judgment for Π, and gives summary judgment to ∆

      2. Posner  Ty is being overzealous in trying to police mark against becoming generic

      3. p. 189  producers don’t own their after-markets




    1. Contrast with p.102, n.1  Promatek v. equitruck: company may not use metatags of its website the TM of competitor, even where company services products made by competitor and identified by TM




  1. Generic Domain Names vs. TM domain names Policy questions

    1. If you register a generic mark, you can keep it for $50

    2. If you register a TM, you have to give it to owner

    3. Why should people who get there first profit?

    4. Would it be OK for first come TM owner (e.g., Apple Records) to sell domain to someone with same TM (e.g., Apply Computers)?

    5. Is it antiquated to think people will search for things by typing in random URLs?

    6. Why allow generic Domain names, if no generic TMs? s?

      1. Domain names are source indicators

      2. BUT no domain name exclusivity  unique addresses; only one company can have them; no genericity

      3. Should we forbid giant speculation in generic domain names?

    1. What if two TM owners want the same domain name?

    2. Virtual Works Volkswagen wanted vw.com  mixed motive of good faith and profit seeking

    3. Madonna

      1. ∆ had a TM in Tunisia

      2. Court held that TM was registered in bad faith. No reason to register Madonna




  1. ACPA (Anti-cybersquatting Consumer Protection Act) (p. 201)

    1. Elements

      1. Bad Faith intent to profit

      2. Registration domain name that is identical or confusingly similar to somebody’s trademark.

      3. Gives some rights to people using own name in good faith

      4. In Rem action if you can’t find person, or don’t have personal jurisdiction

      5. Statutory Damages §1117 of up to $100k

    2. Defenses:r use and Free speech

    3. 3 issues:

      1. What is bad faith intent to profit? Not always clear

      2. In rem actions

        1. How do you prove Bad faith for in rem actions?

        2. Is there adequate notice? Is it constitutional?

      3. How is US interacting with UDRP and ICANN

    4. Electronics Boutique v. Zuccarini (EDPA 2000)  FACTS: ∆ registered different misspelling of eb’s name. Suit brought under ACPA

      1. type-squatting”or “mousetrapping”  Not classic cybersquatting but Legislative history indicates that was the concern behind the act

      2. Definitely bad faith intent to profit

      3. EB wins  $500k damages

    5. P. 224, n.2  “pure heart and empty head defense”

      1. Statute  “bad faith intent will not be found in any case in which court determines person believed and had reasonable grounds to believe use of DN was fair use or otherwise lawful”

      2. Court will probably not let guy off if they think he is nasty


    6. TMI v. Maxwell registered trendmakerhome.com (no “s”). When registration ran out, ∆ re-registers .info website

      1. Court  can’t sue for dilution, because not commercial use

      2. Conclusion  noncommercial grip cite violates none of the statutes

    7. Gripe Site Immunity

      1. Disclaimer

      2. Avoid anything that looks commercial

        1. No advertising links (especially advertising for competitors)

        2. No selling anything

      3. Put “sucks” or “is bad” in the domain name

      4. Best bet Show you’re in good faith, and convince the judge you’re a good guy

    8. NOTE: ACPA applies to non-commercial Use: See P. 229, n.12




  1. ACPA and Registrar liability  see N.3 on p. 224

    1. APCA tries to limit registrar liability to narrow circumstances based on its “refusing to register, removeing from registration, transferring, temporarily diabling, or permanently canceling a domain name.”

    2. Damages liability only if Registrar has bad faith

    3. Subject to injunctive relief only if it fails to tender control of domain name to court, modifies status of domain name except pursuant to court order, or fails to comply with court order

    4. Hawes v. NSI  sued NSI for transferring control of DNS to French Court (where L’Oreal was suing him)  4th dismissed claim
    5. Kremer v. Cohen Sex.com (9th Cir 203)  Π stated claim for conversion under CA law against registrar that transferred ownership of sex.com in response to forged authorization letter


      1. Case seems to say that domain names can be property rights w/ 3 part test

        1. interest capable of precise definition

        2. capable of exclusive possession or control

        3. putative owner must est. legit claim to exclusivity

      2. Radin  this should be like a service, not a lease on property




  1. UDRP Proceedings Overview

    1. WIPO  world Intellectual Property Organization

      1. UN administered in Geneva

      2. Panels are sponsored by WIPO

      3. Is WIPO interfering with national law (when national laws differ)?

        1. Tunisian TMs are easier to get

        2. US requires use in commerce (or bonafide intent)

        3. What about competing identical marks from different companies?

      4. “Use of IP assets has become more international than the enforcement provides for?”

    2. UDRP Proceeding Requirements:

      1. Registeration in bad faith

        1. hard to say if you have valid TM somewhere

      2. Use in bad faith

      3. Contrast with US standard  Bad Faith Intent to profit

    3. Procedure

      1. Convene panel (“arbitration”)

      2. Domain name will either be cancelled or transferred

      3. 10 days to appeal decision to national court

      4. Arbitrators are retired judges, attorneys, etc.

        1. Clashes of values  free speech values tend to protect “sucks” sites under US law and with US arbitrators
        2. If you lose a sucks case in front of WIPO panel under UDRP, bring a review claim to American court


        3. IP lawyers are gnereally corporate; they might favor the corporate claimant over individual




    1. Madonna v. Dan Parisi (WIPO 10/12/04)  ∆ bought domain name for $20K  Registered Madonna TM in Tunisia; argued that he was donating TM to Madonaa hospital

      1. Real TM in Tunisia is NOT dispositive

      2. Everybody could get around UDRP by registering in Tunisia

      3. P. 264  “ICANN procedure would be registered useless”




    1. Barcelona (4th Cir. 2003)  relationship between US and UDRP proceedings

      1. Spanish citizen registers US TM of Barcelona and opens Barcelona.com. City council goes after him through UDRP/WIPO

      2. US Court we take precedence over UDRP; We have jurisdiction and will practice de novo review

    2. Is this an unstable situation?



Copyrights


  1. Basics of © law  Protecting expression

    1. Five basic rights

      1. Reproduction/Distribution: how fixed must a “copy” be? How similar must a “copy” be?

      2. Adaptation (derivative works)  own everything based upon original work:

        1. What is “based upon?”

        2. Broad control of futre markets

        3. Patent law has improvement patents, but improver needs rights from original and vice-versa; facilitates bargaining in a way copyright does not

      3. Publication

      4. Performance

      5. Display  What’s public? What’s private?




    1. Moral Rights are a problem in the US

      1. Rights for authors that go beyond economic rights

      2. Natural rights concept

      3. US needs this for Byrne convention; claim that we have it in some form

      4. Visual Artists Rights Act  only applies to “recognized works of fine art”

    2. Duration70 years after the death of the author

    3. Works made for hire95 years after publication

    4. Expressive elements of things that count as works of authorship

      1. No functional items (patents) Exception for Computer programs

      2. No Facts or ideas 18th century view that facts are out there waiting to be found

    5. Originality requirement Supreme Court requires that the work of authorship be “slightly original”  see Feist p. 466

      1. independently created by the author some minimal degree of creativity

      2. NOT novelty  original as long as resemblance to something else is not result of copying (CLEAN ROOM DEFENSE)

    6. Idea/expression dichotomy “grey area right at the heart of copyright”

    7. Fixation requirement

      1. No longer need the © symbol and date (formalities)

      2. “tangible medium of expression” 




  1. Infringement

    1. Prove you own copyright

    2. Prove copying (which elements were infringed?)

      1. “substantial similarity”
      2. “access to the work”


      3. Unauthorized  implied license, does putting something on the web imply that people have license to copy?

      4. direct infringement  innocent/OK?

      5. Indirect

        1. vicarious

        2. contributory

        3. know or should have known

      6. proof of copying




    1. Defenses

      1. Authorized

      2. Idea/expression merger doctrine (expression is copied because it’s inseparable form the idea)

      3. Fair Use  affirmative defense, unpredictable

      4. Copyright misuse  looks like anti-trust (anti-competitive behavior)

        1. note: antitrust/IP overlay

        2. still about competition policy

      5. Work is not covered

        1. non-public display

        2. method of operation (Lotus)

      6. implied license  internet requires you to make copy to use

      7. Copied ideas, but not expression of ideas




    1. Remedies (often puts people out of business)

      1. Can be done ex parte

      2. Copies can be destroyed

      3. Prelminary/permanent injunctions

      4. Damages: lost profits, infringers profits, statutory damages (per copy)

    2. Licensing Longer copyright lasts, more difficult it is to figure out whose permission you need

      1. “Orphaned works”  What do we do when we can’t find the owners?

        1. Re-registration schemes  property interests

        2. Fight over this with old owners who don’t want to pay fees
      2. Termination of Transfer Provision  Author who licenses out work can take back work for a window of opportunity (years 35-40)


      3. No regulation on what you can charge, other than unconscionable claims (that agreement is contrary to public policy)

      4. No compulsory licensing American ideology: takes away owners’ property rights




  1. What is a copy?

    1. Statute:

      1. Work is fixed in tangible meaning of expression

        1. distinguished from phonorecords  phono-protection came into being later

      2. “Sufficiently permanent and stable,” “more than transitory duration”

    2. MAI v. Peak (9th Cir 1993) Service outfit (Peak) turns on computer in order to service it. MAI claims this is copyright violation because Running program copies it into computer’s RAM

      1. Holding: loading program into RAM results in a copy.

        1. Unauthorized copy: computer programs are licensed, NOT sold.

      2. Effect  greatly expands definition of “copy. Computer makes copies all the time

      3. A lot of courts rely on this, but no supreme court ruling and no legislation




    1. Galoob Toys v. Nintendo Nintendo challenges Game Genie as making unauthorized derivative works

      1. Holding

        1. derivative work has to be in a “concrete and permanent form” Doesn’t use word “fixation?”

        2. Game Genie is useless by itself

        3. doesn’t contain or produce game in concrete or permanent form

        4. doesn’t supplant demand for Nintendo game
      2. Economics: Nintendo wants to stop Game Genie to keep control of their own games/cheating and information about it


      3. Possible Trademark Cause of action

        1. modifies how game is played

        2. Is this dilution?

        3. source confusion of product

        4. Dilution/tarnishment  games are less fun, less challenging

      4. NOTE: Game Genie didn’t produce a copy  it was fleeting. As soon as you unplug the videogame, it doesn’t exist

      5. Galoob’s conclusion can’t be reconciled with House Report that derivative work doesn’t have to be fixed




    1. Micro Star v. FormGen, Inc. Duke Nukem 3D maker allows people to make new level and Encourages them to post on internet. ∆ burns 300 levels onto CD and sells in packaging with screen shots

      1. Declaratory judgment action  wanted court to declare that product was infringing.

      2. KOZINSKI  infringing derivative work; Distinguishes from Galoob

        1. This is “concrete and transportable”

        2. File is still there after you turn the game off

        3. Sheet music analogy




  1. Pop up Ads  p488, note 2

    1. 3 district courts have rejected claims by website owners that pop-up ads are copyright infringement

    2. Copyright owner’s argument that it’s a derivative work

      1. Creating derivative work by putting something over original design

      2. Changing how the screen looks

    3. Arguments against:

      1. You can get rid of it  It’s ephemeral

      2. It’s a separate work
    4. Legal realist tendency  this is about allowing When U to keep the market




  1. Public performance and display




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