AIPLA annual meeting
October 17, 1997
Carl Oppedahl, Partner
Oppedahl & Larson
Frisco, Colorado
www.patents.com
How can trademark owners police their rights regarding domain names?
I do intellectual property law. When I get a call, it is because someone invented something, or because they have a problem. Dozens of times in recent months, the problem is that the client has received a demand letter. The letter states that the client has registered a particular Internet domain name and that this is supposedly infringing someone's legal rights. The clear message is that the client has to give up the domain name or face unpleasant litigation.
Loss of a domain name can be big trouble. Some businesses are wholly dependent on their domain names, and loss of the domain name would destroy the business. Think of Amazon.com, an online bookstore that receives 100% of its business through its web site. Or Juno.com, an email service provider that has a million email customers each of whose email addresses contains "juno.com".
Other businesses might not be destroyed by loss of a domain name, but would nonetheless be greatly harmed. A company may spend large sums of money popularizing a particular web address (for example, in television advertisements and in print media). Loss of the domain name could mean loss of the benefits of the advertising efforts.
The Internet community, and the population at large, and likewise harmed when a domain name is lost. Visitors to web sites that link to the lost domain name find that they click on links, and the links don't work any more. Webmasters have to try to find out the new web address and, once they find it, have to manually update their web sites. People who have bookmarked the web site find that the bookmark doesn't work any more.
And domain names aren't just web addresses, they are also email addresses. People who have stored email addresses in their email programs find that the email addresses don't work any more.
It might be suggested that loss of a domain name is no big deal, that the company that is about to lose a domain name can simply inform everyone who needs to know of the new (replacement) domain name. Such a suggestion misses the nature of the Internet. In general, it is impossible to find all the web sites that link to one's own web site. It is impossible to find all the people whose web browsers have bookmarks to one's own web site. it is impossible to find everyone who has set up one's email address in their email program.
For all these reasons, and more, it is important to try to do everything possible to avoid loss of one's domain name. What can be done?
Avoiding trademark infringement and dilution. An important step for any business is to take reasonable steps to avoid infringing the trademark rights of others. And of course it has always been prudent to do so, even long before the world of the Internet. Naming a company, naming a product, naming a service, each has always required doing a trademark search and obtaining advice of competent trademark counsel that the proposed name is free for use.
But this name clearance process is now more difficult, for two critical reasons: (1) the Internet, and (2) the Federal Trademark Dilution Act.
Because of the Internet, the range of companies that might take offense at your client's domain name (or other company or product name) is suddenly worldwide, and suddenly extends to all possible goods and services. (Before the Internet, there were natural geographic and product line factors limiting who might take offense.) Thus, clearing a name for use in Internet commerce requires searching in more places, and for more possible conflicts, than was previously necessary.
Historically, the process of clearing a proposed name involved determining whether the proposed name would cause confusion with respect to previously used names. Thus a company proposing to use the name "Juno" in connection with providing email services would not have to worry much about a company called Juno that made electric lighting equipment. One would not lead to confusion regarding the other.
Unfortunately for those who are attempting to adopt new names for goods or services, in 1996 Congress passed the Federal Trademark Dilution Act (FTDA). This law removes the defense of lack of confusion, and holds a company liable regardless of whether the company's mark causes confusion or not. All that the challenger must establish is that its trademark is "famous" and that the accused conduct began after the trademark became "famous". Even more unfortunately for those who are attempting to adopt new names, Congress did not see fit to define "famous" but instead merely listed a nonbinding group of eight factors which the court is to weigh in attempting to discern whether or not a mark is "famous".
This means that a trademark search that is intended to uncover areas of possible liability under the FTDA must cover all possible goods and services. And, since there is no way to know with any confidence what trademarks might someday be deemed "famous" under the law (as distinguished from "famous" according to the ordinary dictionary meaning of the term), then the evaluation of the search results is quite difficult.
One protective strategy is the use of a newly coined name (e.g. Exxon, Kodak).
Obtaining a trademark registration (e.g. US or Tunisian). The majority of domain names are obtained from Network Solutions Inc. ("NSI"), a government contractor. Under NSI's policy (discussed further below) there is a great risk of loss of a domain name even if one is wholly innocent of any trademark infringement. One way to alleviate this risk (at least, according to NSI's Fourth Policy, keeping in mind that NSI might change it yet again) is by obtaining a trademark registration from Tunisia.
Tunisia has the advantage that the trademark registration may be obtained within only a few days.
Action item: for any critical domain name ending in COM, NET, or ORG, obtain a Tunisian trademark registration.
One can also protect against NSI's Fourth Policy by obtaining a US trademark registration. The problem with this, as most readers are well aware, is that it takes well over a year to obtain a US trademark registration. Nonetheless it is prudent to obtain US trademark protection, not only due to NSI's Fourth Policy but also for general business reasons.
Action item: review all of your clients' trademarks and tradenames, and apply for US trademark registrations if this has not yet been done. Do this not only for domain names but also for other important names.
Worrying about getting sued. There are two ways to lose a domain name -- by action of NSI's Fourth Policy, or by court order in connection with a lawsuit. So far as avoiding getting sued is concerned, the client can do two things: (1) seek advice of competent trademark counsel regarding whether a name is free for use, and (2) figure out what it would do if it were sued (e.g. establish a relationship with competent trademark counsel prior to getting sued).
Dealing with cease-and-desist letters. As mentioned above, the Internet and the FTDA expand greatly the range of possible writers of cease-and-desist letters. The writer of such a letter may be in any line of business and may be located anywhere.
Any cease-and-desist letter absolutely must be taken seriously. Possible responsive steps include writing back to the challenger or, in some cases, suing the challenger for a declaratory judgment that one is not infringing any rights of the challenger.
One great advantage of a declaratory-judgment action is that you get to choose where the lawsuit will take place, and a second advantage is that you get to choose when it happens.
Writing back to the challenger can also often be a fruitful approach. Depending on the detailed circumstances, a response letter may include a review of the many other trademark owners who share the trademark (i.e. the challenger does not have exclusive use of the mark). It may also include the following quotation from an important Internet trademark court case:
The Court begins with the observation that "unlike a patent or copyright, a trademark does not confer on its owner any rights in gross or at large." MDT Corp. v. New York Stock Exchange, Inc., 858 F. Supp. 1028, 1032 (C.D. Cal. 1994) (citing Traeger v. Gordon-Allen, Ltd., 71 F.2d 786, 768 (9th Cir. 1934)); see also Anheuser-Busch, Inc. v. Balducci Publications, 28 F.3d 769, 777 (8th Cir. 1994) (noting that "unlike copyright and patent owners, trademark owners have no rights in gross"). Therefore, the law does not per se prohibit the use of trademarks or service marks as domain names. Rather, the law prohibits only uses that infringe or dilute a trademark or service mark owner's mark. Moreover, innocent third party users of a trademark or service mark have no duty to police the mark for the benefit of the mark's owner. MDT, 858 F. Supp. at 1034. Consequently, the mere fact that a person registered a SKUNK WORKS or a variation thereof as a domain name does not mean that the person infringed or diluted Lockheed's mark.
(Lockheed Martin Corp. v. NSI, 96-cv-7438, C.D. Cal., March 19, 1997.) A copy of the opinion is available at <http://www.patents.com/skunk/mar19.sht#II>.
Worrying about 30-day cutoff letters from NSI. One of the most frightening and disruptive things that can happen to your client's business is to receive what is called a "30-day letter" from NSI. In such a letter, your client learns for the first time that NSI conducted a secret proceeding in which it decided that your client's domain name will be cut off. In this proceeding, of course, your client was not permitted to tell its side of the story, as would be the case if the proceeding had taken place in a normal court. Instead, judgment has already taken place and NSI has chosen to side with someone else in determining to cut off your client's domain name.
If your client receives such a letter, time is of the essence. You must very quickly determine whether to sue NSI and ask the court to order NSI not to carry out its threat. Alternatively, you may find that suing the challenger makes sense. Finally, you may find that it is wise to sue both NSI and the challenger. For a listing of many cases in which domain name owners have sued NSI to keep from losing their domain names, see <http://www.patents.com/nsi.sht>.
Analysis And Recommendations Regarding NSI Domain Name Policy, at <http://www.patents.com/nsi/iip.sht>;.
How is a Domain Name like a Cow?, at <http://www.patents.com/pubs/jmls.sht>.
Your client's failure to police the marketplace for infringement of its patents or copyrights generally only loses its right to obtain remedies from the particular infringers that the client failed to detect. And in any event, patents and copyrights eventually expire and lack of enforcement eventually means nothing.
In contrast, your clients' failure to police the marketplace for infringement of their trademarks can result in complete loss of trademark rights, and these are rights that could otherwise have remained in force benefiting your client's business in perpetuity.
Historically it might have been sufficient to police only in particular geographic market areas, and only in particular areas of goods or services. Now, because of the Federal Trademark Dilution Act, your client needs to consider whether to police all possible goods and services. And, because of the Internet, your client needs to consider whether to police the entirety of the Internet. This essentially means pursuing trademark rights worldwide.
Searching existing domain names. If you have not already done so, search all existing domain names to see whether any of your client's present names (company name, product names, service names) turns up. Investigate each one to see what use the domain name owner has made or is likely to make of the domain name. If the domain name isn't actually being used, place a watch on it so that any use that harms your client may be detected as soon as possible.
Monitoring newly registered domain names (especially the seven new top-level domains). It is likely that new top-level domain names (FIRM, ARTS, etc.) will come into existence within a year. It is prudent to monitor domain name registrations in those domains, especially if any of your client's trademarks are unique and/or coined names. In addition, your client may wish to consider obtaining protective registrations for domain names in those top-level domains corresponding to your client's trademarks.
Watching Internet activity generally (not just domain names). It is all too easy, when the newspapers are filled with accounts of fights over domain names, to forget that there are many, many ways in which someone could infringe your trademark rights by means of something other than a domain name. For example, see below the discussion of meta-tag infringement.
Worrying about declaratory judgment lawsuits. Your policing activity may uncover activities of others that appear to infringe your client's trademark rights. It is a mistake, however, to fire off a cease-and-desist letter without due consideration. After all, a cease-and-desist letter may prompt the recipient to sue your client for a declaratory judgment holding that they are not, in fact, infringing any of your client's legal rights. Being sued in this way forces your client to defend itself in a distant forum, or face the risk of losing any claim against the recipient.
Keeping the issue in context: understanding how people find web sites
The designers of the Internet never intended that the domain name system would be a way of finding companies or web sites. In particular, they never intended that domain names be "guessable", except in the special case of coined and unique names such as Exxon and Kodak.
Despite this, it is commonplace for many people, generally newcomers to the Internet, to try to find a company or Web site by simply adding "com" to the company's name and typing the resulting guess into their Web browser. Sometimes this succeeds, generally in the case of coined, unique names. But generally, in 1997, it fails. For example, if you are looking for the Brown Shoe Company, it is extremely unlikely that you will find its web site by plugging in "www.brown.com" into your Web browser, for the simple reason that there are thousands of companies called Brown. (In fact, you would reach the Ted R. Brown Insurance Agency in Lexington, Kentucky.)
A newcomer to the Internet soon learns, however, that guessing is a waste of time, or, more precisely, that one should not give up after guessing fails. Instead, one should proceed to the use of online directories (e.g. Whois), and search engines such as Altavista, Lycos, and the like.
For example, searching "Brown Shoe" in Whois yields the information that the Brown Show Company of Canada owns the domain name BROWNSHOECO.COM. (Further efforts reveal, however, that while the Brown Shoe Company of Canada does own that domain name, it has not gotten around to setting up a web site at that domain name.) Searching "Brown Shoe" in Altavista leads to a number of Web sites that mention a company by that name, but none that appear to be operated by a company with that name.
The main point to be made here is that any company selecting a new domain name needs to be aware that potential visitors to the company's Web site are likely to be increasingly knowledgeable about search engines and other ways of finding domain names. As a consequence, one should not despair even if one's first-choice domain name is already taken by someone else. (In the special case where the desired domain name corresponds to a unique or coined name, one should investigate the bona fides of the domain name owner and consider asking that the domain name owner hand over the domain name. See generally <http://www.patents.com/pubs/jmls.sht>.)
The Prince case. Typical of recent disputes is the Prince case. A company in England that does computer consulting and training, called Prince, had been using the domain name prince.com for several years. The Prince sporting goods company in the US decided it wanted the domain name, and wrote to the domain name owner accusing it of trademark infringement.
The domain name owner invoked a provision of the British trademark law that allows relief against groundless cease-and-desist letters. The sporting goods company ended up with mud on its face; the court directed Prince not to write any more cease-and-desist letters.
The outcome was, of course, tied to the specific language of the trademark law in Great Britain.
Will the new top-level domains solve trademark problems? As mentioned above, it is expected that within a year, there will be a half a dozen new top-level domains such as FIRM and ARTS. (See generally <http://www.gtld-mou.org/docs/faq.html>.) My personal view is that this will not diminish the frequency of fights over COM domain names, and will do little more than add to the areas in which disputes will arise. It will surely add to the burdens on those who feel compelled to police the marketplace for possible trademark infringements.
Meta-tags. A search engine such as Altavista visits Web sites one by one, making note of the words found on the Web sites. The resulting database (called a concordance) is used to serve search engine users in their quest for Web sites containing particular words. The visits that are used to compile the concordance are called "robot" or "spider" visits. On our web site at <http://www.patents.com>, we get an average of about five such robot visits per day. (This is reported in our "hits" page at <http://www.patents.com/hits.sht>.) As of October 16, 1997, the most recent search engine robot to have visited our site was ArchitectSpider, on the 16th. Infoseek's most recent visit was also on October 16th.. Altavista's most recent visit (its robot is called "Scooter") was October 12th.
A new kind of unfair competition has developed in which the operator of a Web site will try to trick the search engines into sending more visitors to the Web site. An early tactic was to devote a region at the bottom of a Web page to have a background of a particular color, and to contain text that is specified to be that same color. The result, to the eye of the visitor, is a featureless region. For the search engine robot, however, the text is perfectly "visible" and is inserted into the concordance. Humorous and probably true stories have been told of Web site operators who would conceal the word "sex" hundreds of times in a Web page, and who would then find that the daily count of visitors would go up by a factor of ten ore more, presumably because some people go to search engines such as Altavista and type in such words. If the visible portion of the web page has nothing to do with sex, then perhaps the chief result is simply some mischief and perhaps some disappointment on the part of the visitor.
The Web continues to evolve, and now there are new ways to conceal text in Web pages. For example, the Web site operator can use what are called "meta tags" to signal to the search engine robots that particular words should be placed in the concordance. A well- intentioned Web site operator can use meta tags to benefit the users of search engines by providing search terms in addition to the terms contained in the visible text of the Web page.
But suppose the Web site operator draws upon someone else's reputation or goodwill to draw in visitors? Suppose, for example, that the Ford Motor Company were to hide words such as "Chrysler" and "General Motors" in meta tags on its web site. The result would be to trade on the name recognition of the other companies.
A real-life example of this can be seen at <http://www.patents.com/ac>, which describes a lawsuit brought by our law firm against the operators of some Web pages that contained "Oppedahl" and "Larson" eight times each. it is difficult to see how such hidden text could get into the Web pages by accident, and it is likewise difficult to imagine an innocent explanation for such conduct. We discovered this conduct, involving our firm name hidden in meta tags, by searching for "Oppedahl" in Altavista.
Action item: set up a regular program of Web searches for possible infringements of your clients' names and trademarks.
It is doubtful that any of us could have predicted, six years ago, how important the Internet would turn out to be. Four years ago, few of us could have predicted how important the World Wide Web would turn out to be. Even after the Web had existed for over a year, few could have predicted that search engines such as Altavista would later develop that would completely transform the way people find things within the Web. Pundits have taken to talking about "web years" the way pet owners speak of "dog years", to attempt to convey the rapid pace of change on the Internet.
For example, in 1994 when our firm was making its initial plans for an Internet presence, there was a period of time when it seemed to us that we would probably set up a Gopher site, not a Web site. Now in 1997 no one bothers to visit Gopher sites any more. And no one bothers to set up new Gopher sites. It never crosses anyone's mind that a new Internet presence would be anything other than a Web site.
If three years is enough for an entire category of Internet sites (Gopher sites) to fall out of fashion and be supplanted by Web sites, who can begin to guess what will be important three years from now?
This page is <http://www.patents.com/pubs/aipla.sht>. Revised October 16, 1997.