There has always been discord between the domain name registration system (which awards the universal right to a domain name to a singular owner) and the world’s patchwork trademark registration systems. The latter protects a mark solely in national, regional, or treaty-created geographic areas, and only insofar as it is registrable in relation to narrowly tailored classes of goods and services. Recent developments will cause the two worlds to continue to converge or, depending on your viewpoint, conflict.

On March 26th, the Trademark Clearinghouse (TMCH) came into being. Its primary purpose is to protect trademark holders against potential infringement upon the arrival of multiple new generic Top-Level Domains (gTLDs) in the Internet ecosystem later this year. The TMCH is the sole database of validated trademarks under the auspices of The Internet Corporation for Assigned Names and Numbers (ICANN), the California-headquartered institution formed in 1998 that oversees all domain names.

Ninety-six percent (96%) of major consumer brands indicate they believe the new gTLDs present a risk to their online intellectual property, yet twenty percent (20%) of the top 200 consumer brands surveyed as of last month still had little or no awareness of the new domains. This, no question, creates an atmosphere ripe for significant trademark infringement exposure.

The TMCH will perform two primary functions: (1) authentication and verification of contact information and trademark records; and (2) maintenance of those records in a database available to the new gTLD registries to support the provision of “Notifications of Registered Name” (“NORN”). One thing the TMCH does not do is create new rights in the marks or domain names.

Recording a mark in the TMCH provides the trademark holder with the opportunity, during the “Sunrise Period,” to pre-emptively register domain names which match its trademark in advance of general public availability of the new gTLDs. Between sixty percent (60%) and eighty-eight percent (88%) of major consumer brands (depending on the research cited) have expressed an interest in obtaining such registrations.

Sunrise Periods were utilized when new TLDs were introduced 10 years ago to allow trademark owners to pre-empt domain name pirates. The primary difficulty at that time was the registries’ inexperience in verifying the validity of the marks submitted. This time around, more than 100 personnel have been trained to evaluate the validity of marks in many countries.

It is possible that a rightsowner could confront many entries in the TMCH for the same mark when it explores its holdings. Some watching the developments believe that an auction system might be the most equitable way to determine who will be able to register a name during the Sunrise Period.
Additionally, for the ninety (90) days following the launch of each respective new gTLD web extension, a trademark holder with a TMCH registration will receive a warning when any other party registers domain names that match the registrant’s marks. This “Trademark Claims Service” is reportedly in demand and supported by sixty percent (60%) of major consumer brands, but there is concern among commentators that trademark violators may just be under scrutiny for the 90 days, with less challenged infringement occurring thereafter.

Recent proposals thus include a thirty (30)-day notice period before the Sunrise Period and an extension of the Trademark Claims Service timetable. The first thirty (30) non-Latin gTLDs have completed ICANN’s evaluation process. New gTLDs (particularly those domains for which there are no competing applications or objections) could start their Sunrise Period and be introduced to the root zone this summer.

If the TMCH recognizes a conflict, the domain name applicant can still continue with registration, but will have been provided constructive notice of the potential adverse trademark protection. If the domain becomes registered, the trademark rightsowner is notified and can then make an informed election about monitoring the usage and whether to initiate (a) a complaint under established uniform domain name dispute resolution protocol, or (b) a trademark infringement action.

The TMCH does not have any geographical limitation. Fifty-two percent (52%) of brands surveyed are interested in securing geographic domains relating to their trademarks, such as .SCOTLAND or .AFRICA. The opportunity to reach new markets via international domains presented in foreign language scripts is an attraction to sixty percent (60%) of the surveyed brands.

The price of TMCH registration will range from US$95 to US$150 per year per trademark, depending on the number of marks submitted and the length of registration period selected. If another registry provider commenced provision of services to an easy-to-validate segment of the market, the price of registration in developed countries might be reduced while it concurrently rises for applicants in jurisdictions where authentication is more difficult to achieve.

A pricing discount will be offered when one thousand (1,000) “status points” are obtained, which could mean 1,000 registrations in a year or less if the trademarks are registered for three or five years (more status points are given for longer registrations). Establishment of a TMCH record is prerequisite to eligibility for Sunrise Period pre-registration. That said, there is a possibility that registries could also acknowledge pre-registration rights for marks not recorded in the TMCH.

Law firm clients should be advised that having a TMCH registration does not secure the subject mark in every single trademark or domain name registry. Each registry will have its own policy, which may limit registration on the basis of, e.g., presence in a geographic zone or a designated native language or community group.

The Clearinghouse will be jointly operated (but under separate contracts) by IBM and Deloitte, with IBM administering the database and Deloitte providing the authentication services. Later, ICANN may allow competitive parity by permitting trademark owners to choose from a variety of trademark clearing services. With the database of recorded trademarks under direct contract, ICANN has paved the way for opening up competition for the authentication services component of the regime.

Nearly eighty percent (80%) of brands polled believe that the introduction of the TMCH will help protect their intellectual property online. Trademark attorneys and their clients certainly hope that it will.

Survey results cited here are from Deloitte and Vanson Bourne.

More information is available at the TMCH website, www.trademark-clearinghouse.com.

The Atlanta Business Chronicle reports that Atlanta Internet telephony company Vocalocity Inc. plans to use $10 million of funding secured to grow its presence and add up to 100 new employees.

Vocalocity provides Internet-based phone systems to small businesses, enabling them to make and receive calls via its voice over Internet protocol (VoIP) technology.  Vocalocity also offers data analytics, data mining and call monitoring software to increase margins and the effectiveness of customer service personnel.  For example, managers can see statistics on the quantity and duration of calls made by a given salesperson.

Last month, Vocalocity won INTERNET TELEPHONY’s 2012 Product of the Year award for its call monitoring service, which enhances the capability to improve client engagement, training processes, and productivity measures.  This add-on works by giving authorized users the ability to listen in on calls and speak directly to the host without other callers hearing.  A supervisor can silently observe a client call with a new employee, assist the employee without anyone overhearing (“whisper”), or elect to personally join the conversation (“barge”).  Of significant legal import for Georgia attorneys and their clients, users have the option to notify call attendees, via a built-in announcement, that the call may be recorded.

Vocalocity garnered the same Product of the Year award from the editors of the trade publication in 2010 and 2011, as well.  Additional recognition has come to the Atlanta upstart from being selected for the Deloitte Technology Fast 500 (the fastest growing technology companies in the U.S.), and its second appearance in a row in the Inc. 5000, an exclusive ranking of the nation’s fastest-growing private companies.  Georgia’s Vocalocity was also recognized as a leading private company creating American jobs by Inc.’s inaugural Hire Power Awards.

The Atlanta company’s CEO, Wain Kellum, was the prior chief executive of Alpharetta, Georgia-based Omnilink, which specializes in markets for end-to-end location-based services utilized by enterprises, consumers and governments.

An unfair competition suit against an Atlanta-area garage door company has taken on another dimension, with claims that purported trademark violations that were effectively halted in the physical world are now taking place via the defendant’s Internet and keyword advertising.

The claims, including unfair competition and deceptive trade practices in relation to the plaintiff’s (and its licensor’s) registered trademarks and logos, are being litigated in the Federal District Court (Northern District of Georgia), which sits in Atlanta.  A settlement agreement was entered, in which the defendant agreed not to use:

  1. “Overhead” in a trademark or trade name that also includes an Atlanta-related name;
  2. “Overhead Garage Door[s]” as a trademark or trade name;
  3. a trademark or trade name that emphasizes the word “Overhead,” “Overhead Door[s]” or “Overhead Garage Door[s]”;
  4. any Atlanta-related name along with the word “Overhead” in any domain name; and
  5. the phrases “Overhead Garage Door[s]” or “Overhead Door[s]” in any online or print advertisement, except in a purely descriptive sense.

Portion (4) concerning the domain names is fairly easy to police, but at issue now are sponsored advertisements appearing in Google results and other potential breaches of the settlement agreement that can be more clandestine.  The plaintiff submits that trademark infringement and unfair competition are recurring, and has now asked the Court for a permanent injunction to prevent the defendant’s continued use of plaintiff-related trademarks.  The motion also seeks multiple forms of monetary damages, attorneys’ fees, and disgorgement of profits.

Evidence of the complete usurpation of the world by the Internet resides in the fact that two garage door companies are fighting about trademark infringement ocurring via use of branding marks on the Web.  At what point in time did things like this stop being unfathomable?

 

Thanks to all for their support of the Sixth Sense Law concept and the Richardson Sixth law firm.

Additional content regarding significant legal developments related to Internet law is forthcoming right here!

In the meantime, happy Thanksgiving and peace to all.

 

 

 

Mark Richardson

Attorney and Founder

Richardson Sixth, LLC

www.SixthSenseLaw.com

www.GeorgiaInternetLaw.com

 

Further recent decision related to most recent post:

This time, the Second Circuit upholds a preliminary injunction enjoining the defendant from live Internet streaming of television programs, holding that the defendant is not entitled to a compulsory license to stream plaintiffs’ copyrighted programming because it is not a “cable system” under §111 of the Copyright Act.

WPIX, Inc. v. IVI, Inc.

 

 

 

In March of this year, major American television broadcasters brought a preliminary injunction motion in the U.S. District Court for the Southern District of New York, attempting to immediately stop Aereo, Inc. from transmitting real-time Internet access to their copyrighted programming contemporaneously with their over-the-air broadcasts.

On July 11, 2012, the federal court denied the broadcasters’ and content owners’ request, relying on the Second Circuit’s (New York federal appellate court’s) decision in the “Cablevision” case [Cartoon Network LP, LLLP v. CSC Holdings, Inc., 536 F.3d 121 (2d Cir. 2008)]. Both the Cablevision and Aereo cases interpret the “public performance” clause of the Copyright Act in light of emerging technologies that facilitate new means of delivering television programming.

In Cablevision, the court held that the cable operator’s RS (Remote Storage) DVR did not infringe the public performance right of the cable networks whose content was being recorded. The analysis was that a unique transmission was essentially being made to a single subscriber. Unlike traditional DVRs, which record programs on a hard disk in the home like old-time VHS, the Cablevision customer’s dedicated disk resided at the cable system’s head-end, reducing deployment expense.

Aereo’s system uses dime-sized antennas to pick up over-the-air television signals at subscriber request. Programming is copied in a server that performs DVR functions, and is then sent to the subscriber via Internet. The subscriber may view the programming on a variety of devices. For the user, Aereo’s system is like a DVR where playback may be elected to be nearly real-time or delayed. Unlike other DVR services, however, Aereo did not obtain copyright or retransmission licenses to provide the broadcasts.

The Aereo court found that a given Aereo antenna can be used by only one user at a time, each antenna functioning independently. The opinion’s rationale was that, under the unique and limited Aereo fact set, unique copies created by Aereo subscribers do not differ substantively from those made by the remote-storage DVRs approved in Cablevision. The court thus far has found that Aereo copies do not constitute performances made “to the public” under the Copyright Act, because only the individual subscriber is capable of receiving a particular downstream transmission of a performance. Aereo’s system thus falls within the “one-copy-per-transmission” test (as opposed to one copy of the content being the source basis of many transmissions), though many viewers can see the same underlying work through the system at different times and places.

The Aereo case has deep policy and economic ramifications. Ninety percent (90%) of viewers today get programming from cable or digital broadcast service distributors rather than over-the-air signals, generating enormous retransmission consent fees for broadcasters. Some cable operators see the Aereo technology as a way to circumvent tedious and costly battles over this pot of money (to reiterate, unlike a cable operator’s relay of content under color of broadcaster consent, Aereo does not seek permission to use the broadcaster’s signal). At the same time, online video distributors may see Aereo’s effort as a means of circumventing cable by providing popular DVR-enabled programming and supplementary Internet-based content.

The District Court in Aereo actually agreed that the plaintiff broadcasters had demonstrated irreparable harm arising from Aereo’s service (and that a public interest would be served by issuing an injunction against Aereo), but did not believe that harm outweighed the economic peril faced by Aereo if the preliminary injunction was issued. The case will thus proceed on the merits.

This early lower-court ruling is viewed as an advancement for interests seeking to expand access to copyrighted materials without requirement of traditional licensing. At a minimum, it preliminarily and potentially recognizes the legitimacy of a means of streaming broadcast signals over the Internet without obtaining copyright permission or retransmission consent.

In terms of copyright law and Internet law, of course, the battle has no more than commenced. The Second Circuit (the same court that decided Cablevision) is next to speak. After that guidance issues, it is a certainty that similarly situated parties will seek to have their respective stances confirmed by courts in other jurisdictions.

Google is threatening legal action against popular websites, such as YouTube-MP3.org and Music-Clips.net, that convert the audio portion of YouTube videos into MP3s. Google alleges these sites allow users to download content directly from YouTube for free, constituting a breach of YouTube’s Terms of Service.

Converting YouTube content to MP3s has become more popular since the demise of file host Megaupload in January 2012, which made free media more scarce. It is more difficult to identify and prosecute individuals using the YouTube conversion sites than “torrent” users downloading music and movies via services that aggregate small portions of the complete content from many different web sources concurrently.

Major record companies have pressured YouTube to do more to halt the proliferation of MP3 conversion services. The Recording Industry Association of America cited the issue in a December 2011 report on how well Google protects copyrighted material, also stating that, “YouTube hosts videos explaining how to ‘game’ the Content ID system, and how to rip the audio content to create an MP3 file from a music video.”

Google demands that the conversion sites cease using the YouTube Application Programming Interface (API) to allow users to “separate, isolate, or modify the audio or video components of any YouTube audiovisual content.” It has blocked YouTube-MP3.org’s servers from accessing YouTube.

YouTube-MP3.org’s owner responded with a statement claiming that the site does not actually utilize the API and that “German [c]ourts have ruled that an online recording tool is not different from any [TV] recorder or something [comparable].”

Google is, of course, the parent company of YouTube. YouTube has made major investments to license music videos and allow users to incorporate free music into their clips. It must now balance this proprietary interest in premium media with Google’s advocacy of free culture and an Internet free of censorship.

Boundless Learning, a Boston-based start-up (“Boundless”), has been sued by textbook publishers for copyright infringement in the important United States District Court for the Southern District of New York. The Boundless educational content is intended to be Open Educational Resources (“OER”) material publicly provided without intellectual property restrictions. This would allow students, teachers, and anyone else to freely use it in a manner similar to open source software. The primary allegation is that Boundless violated the Copyright Act by creating, advertising and distributing free “replacement copies” of several of the publishers’ most widely used collegiate textbooks.

Copyright protection expressly does not cover ideas, procedures, processes, systems, methods of operation, concepts, principles, and discoveries, regardless of the form in which they are described, explained, illustrated, or embodied. Also, facts are not copyrightable. This is essentially because, for societal progress and intellectual discourse to occur, everyone needs to be able to freely discuss ideas, concepts, etc. Of course, textbooks consist largely of these elements that do not attain copyright protection.

Copyright infringement can be shown by evidence of actual word-by-word copying (which the publishers do not claim happened), or by evidence that (a) the defendant had access to the copyrighted work and (b) the allegedly infringing work is substantially similar to the original. When determining substantial similarity, the court generally applies an “ordinary observer test” that considers whether the average reader would overlook any differences in the works and conclude that one was copied from the other. Where a work contains both copyright-protected and unprotected materials, as do traditional textbooks, the infringement inquiry does not consider the unprotected elements and compares only the original creative elements.

The Publishers, focusing on the access and similarity test, allege that Boundless has created shadow or alternative works that infringe these original creative elements of their textbooks. They assert that the Boundless versions mirror the organization, content selection, presentation and layout of the publishers’ texts. In contrast to the factual substance of the books, these are copyright-protected elements. Though the Boundless versions may use different words to convey the same themes, Boundless itself had earlier marketed its materials as free alternatives that were similar enough to the popular textbooks to include all the important elements of the originals, down to equivalent graphs and photos.

Are the protected elements of the publishers’ works sufficiently creative and unique to legally prevent Boundless from distributing free versions that merely paraphrase the original textbooks? The publishers claim that, over time and with great effort, they have identified, assembled, arranged, and presented the contents in the most teaching-effective way. Contrarily, Boundless will argue that any similarities between the information and structure of the respective textbooks merely reflect the common understanding of the order and importance of these well-studied topics.

This case, in combination with the recent Georgia State University case (discussed in the last post here), may have tremendous impact on the textbook industry and those businesses with similar copyright concerns.

Last month, the Federal District Court for the Northern District of Georgia issued a 350-page opinion in Cambridge University Press v. Becker, largely upholding Georgia State University’s “fair use” defense in a 2008 copyright infringement case brought by a coalition of textbook publishers. If upheld, the decision may allow academic institutions and others to avoid liability under U.S. copyright law for sharing portions of digital documents online.

Georgia State allowed its faculty to post excerpts (often an entire chapter) from copyrighted textbooks to an online “electronic reserves” system, making them available for free to students in their respective classes as long as the faculty member applied a checklist to determine whether the posting would qualify as fair use under copyright law.

The majority of the Court’s opinion focused on that doctrine of fair use, stemming from 17 U.S.C. §107, which provides that the fair use of a copyrighted work, including for purposes such as criticism, comment, news reporting, teaching (including multiple copies for classroom use), scholarship or research, is not an infringement of copyright. In determining whether the use made of a work in any particular case is a fair use, the factors to be considered include the:

1. purpose and character of the use, including whether such use is (a) “transformative” (i.e., adds something new or different), and (b) of a commercial nature or is for non-profit educational purposes;

2. nature of the copyrighted work (informational vs. creative, with the latter entitled to more protection);

3. amount and substantiality of the portion used in relation to the copyrighted work as a whole, which inquiry includes a qualitative element of whether the “heart” of the work was copied; and

4. effect of the use upon the potential market for or value of the copyrighted work, including whether a license to the copyrighted materials could have been purchased by the defendant through some readily available market.

The court sided with Georgia State with respect to counts on 69 out of 74 documents, generally finding that the university published only small excerpts online with no intent to profit. The court, however, found the “fair use checklist” policy deficient because it did not (y) limit copying to quantities of a single chapter or less, nor (z) require faculty members to evaluate the effect on the market for the copyrighted work.

Despite the defendants’ substantial wins, the plaintiffs now have a declaration that the Georgia State policy contributed to at least some copyright infringement. If upheld, the decision suggests that academic institutions may be permitted to post excerpts of copyrighted works so long as the publication is in compliance with written policies that: (i) prohibit publication of more than a chapter (or other relevant section identifier); and (ii) consider the publication’s effect on the market for the original work. Additional guidance on these matters is likely to come from the appellate courts.

The Technology Association of Georgia (TAG) named the following the top 40 innovative technology companies in the state for 2012:

• AirWatch
• Aptidata Corporation
• BrightWhistle
• CodeGuard
• CompliancePoint, Inc.
• Concurrent Computer Corporation
• Contact At Once! LLC
• CorFire
• CubeVibe
• DataOceans, LLC
• Digital Assent
• eFortresses, Inc.
• EyeLevel Interactive
• First Data
• FreebeePay, Inc.
• Implantable Provider Group (IPG)
• Innovolt
• Kabbage, Inc.
• Lancope
• Mowgli
• NCR
• Neurotic Media
• NextInput
• NexTraq
• Numerex
• Patientco
• Paymetric
• Pindrop Security
• PlayOn! Sports
• Podponics
• Proximus Mobility, LLC
• rappidApp
• Red Bag Solutions, Inc.
• SalesLoft
• ShopVisible
• TerraGo Technologies
• TripLingo
• Velocity Medical Solutions, LLC
• Vertical Acuity
• Whiter Image

The original TAG press release issuing the list is here.