“Q&A”: The Trademark Professional’s Forum
Trademark attorneys respond to questions about industry topics of interest

With the continued growth of the Internet, specifically in marketing-related areas such as blogs, viral marketing, social networking sites like myspace.com®, and virtual world sites like Second Life® – where more and more large companies are setting up shop using real world branding – how might IP law change over the next several years? And, as the prevalence, scope and popularity among marketers for these and other like-sources grow, how does legal counsel determine what to monitor and litigate vs. what to let go?

Robert B. Golden
Lackenbach Siegel LLP
www.lackenbach.com

Bio:
Rob Golden heads the firm’s Litigation and Licensing practice groups. He handles trademark, trade secret, patent, copyright, and related matters throughout the country on behalf of a diverse client base. He has particular experience litigating the availability of damages in trademark infringement matters, having taken the issue through the appellate level on numerous occasions. Mr. Golden has also written and lectured extensively on trade dress issues and the protection of product designs using a combination of the trademark, patent, and copyright laws. He additionally oversees large-scale licensing programs for clients in the fashion, shoe, sporting goods, toy, and tool industries.

Response:
The courts and legislators typically have a hard time keeping up with technology. The area of intellectual property law has been no exception. Both the courts and law makers have struggled with issues such as applicability of the copyright laws to peer to peer networks (e.g., Napster and Grokster) and the validity and infringement of Internet directed business-method patents, e.g. Amazon’s “1- click” patent. On the trademark front, one of the ongoing issues involves the definitions of “use in commerce” and “in connection with the sale, offering for sale, distribution, or advertising of any goods or services” as they relate to the Internet. Court rulings have been inconsistent and thus, the legislature must act to both resolve the split and modernize the law.

A prime example of the existing problem can be seen in the courts’ treatment of the purchase and use of key words in “pay-for-priority” search engines (the more you pay, the higher-ranked your results), such as Google® and GoTo® (now Yahoo!’s search marketing services). Google, GoTo, and others which operate similar programs, sell key words. When an Internet user enters the key word into the search engine, ads (or links or other information) for the purchaser(s) of the key word are displayed. The trademark issue arises when the purchased keyword is a trademark owned by another party. When this occurs, a search using a trademark as the keyword will not only return search results related to the trademark owner or its products, but also results relating to the key word purchaser which, in many cases, will be a competitor of the trademark owner. Some courts have held that buying and selling key words is trademark use, while others have held that it is not trademark use. The determination of “use” is critical because absent use, there can be no infringement. For a good survey of this issue and the case law, see 800-JR Cigar, inc. v. GoTo.com, Inc., 437 F.Supp.2d (D.N.J. 2006). Similar issues of use are bound to occur in Second Life® and other virtual worlds, where trademarks will be “used” by other than the trademark owner. While the likelihood of confusion created by such “uses” will have to be judged on a case by case basis, there can be no doubt that some such uses will create confusion.

Over the next several years - and hopefully sooner - the law must change to recognize virtual “use” of trademarks as use under the Lanham Act. Absent such a change, trademark owners will continue to be subjected to unwanted and unfair use and dilution of their valuable marks. Assuming the law is changed making such use actionable, counsel will engage in the same types of cost / benefit analysis they conduct for more traditional potentially infringing uses.

Jason Firth
Greenberg Traurig
www.gtlaw.com

Bio: Jason Firth has extensive experience in counseling clients on establishing, protecting and defending copyright and trademark rights. He represents clients in technology transfer agreements, domain name disputes and licensing negotiations. Jason has represented large and small companies in the gaming, hospitality, technology, entertainment, manufacturing, media, and petroleum industries. Previously, Jason was Senior Trademark Counsel at Palm, Inc. He oversaw the legal aspects of Palm's global rebranding with a cross-department position as Palm's lead tradeshow spokesperson, teaching customers to use handheld computers and related technology.

Response: One guide to companies seeking to protect their trademarks in the age of increasing virtual trademark use is an examination of the underlying principals of trademark law. Primarily, U.S. trademark law protects against consumer confusion (likelihood of confusion is the touchstone of infringement). Protection of ownership rights is a secondary focus, put into effect be relatively adolescent anti-dilution laws. When faced with thousands of hits from online trademark monitoring reports, a brand owner might dislike 40%, but focus first on the 20% that really cause consumer confusion. In other words, just as in other areas of your business, be consumer focused.

Social networking sites and blogs often engage in peripheral use of a trademark for its entertainment factor. To illustrate, PEREZHILTON.COM, the celebrity entertainment and commentary site, arguably infringes upon the mark PARIS HILTON, registered in connection with the same services. However, does use of the mark perezhilton.com actually confuse consumers about Paris Hilton's affiliation with, or endorsement of the site? Probably not.

One way of determining which uses really cause confusion is to teach your employees and customers about your trademarks and give them contacts for reporting trademark violations. Consumers know how to spot harmfully confusing trademark uses are often willing to report them. A happy prior user of your website will report a knockoff website if she knows how. Your sales manager’s nephew will spot a confusing MySpace page purporting to be your company’s. If you get such reports pay particular attention to them. Don’t just enforce your rights against the violators. Also consider the types of violations reported by real consumers, then be particularly mindful of similar violations reported by automated watching services.

Alan N. Greenspan
Jackson Walker LLP
www.jw.com

Bio: Alan N. Greenspan is a partner in the Litigation and the Intellectual Property sections of Jackson Walker. His primary areas of practice include complex commercial and intellectual property litigation, intellectual property law, and media law. Mr. Greenspan has extensive trial experience, in cases ranging from complex commercial matters to wrongful death actions. In addition to his litigation practice, Mr. Greenspan represents clients in the protection of their intellectual property assets, including trademarks, service marks and copyrights, and counsels clients regarding advertising law and regulation. Mr. Greenspan also has conducted special independent investigations at the request of the audit committees of corporations.

Response: The most immediate need with respect to the evolution of trademark law is a resolution to the question of trademarks in website metatags and as commodities for purchase from web search engines. There is a serious and confusing split of authority, with some courts holding that these practices constitute infringement and other courts holding they do not. Much is at stake for the search engines, and I expect them to fight hard to maintain the right to sell an "inventory" of trademarks. But trademark holders likewise have much at stake. I anticipate a hard fight, but I hope for a quick one, since definitive guidance is immediately needed.

As we continue to witness the expansion of the "cyberworld," trademark law will have to better define such concepts as "use in commerce." For example, is a use in a "reality" that exists only on line a "use in commerce"? Ultimately, the question will come down to analogies to "real life," with a focus on the fundamentals of trademark law. Is the use identifying a source of a good or service, and developing good will? If the answer is "yes," then trademark law ought to offer protection. Similarly, when faced with on line infringement, a trademark holder should be focused on the fundamentals of whether there is a realistic potential for harm or confusion. Trademark owners could go broke policing every cyberspace infringement, and therefore owners are going to have to pick battles very carefully.

Lastly, I think we will, over the course of the next decade, see the proliferation of a new type of "experiential" trademark. Goods and services will be branded using several senses - sight, smell, touch and sound - simultaneously. A mark will not be a "word" mark, or a "design" mark, or even a "sound" mark, but a combination of all three and more. Taken alone, perhaps none will be distinctive, but taken together, a potential consumer will easily identify the source. These experiential trademarks will be entitled to protection, and the law is going to have to adapt to accomplish that.

Erik J. Phelps
Michael Best & Friedrich LLP
www.michaelbest.com

Bio:
Erik Phelps is a partner in the Business Practice Group at Michael Best & Friedrich. As a former information technology professional who also worked as an in-house lawyer at international multi-channel retailer, Lands’ End, Mr. Phelps brings a unique perspective to the technology-related transactional work that is the focus of his practice. Prior to obtaining a law degree, he worked as a computer programmer, a consultant for the technology arm of the US House of Representatives, and as the information technology director at a large Washington, DC law firm.

Response: It has been said that the only constant on the Internet is “change,” and the pace and complexity of change is ever-increasing. In this evolving “Web 2.0” world, lawyers have the daunting task of applying traditional legal principles to the new issues. I believe that a lawyer’s only hope in predicting how the law will evolve is to examine current business trends closely and then map the import of these trends into likely evolutions in the law.

While there is no universally-accepted definition of “Web 2.0,” wikipedia identifies themes for the “new” web as collaboration, participation, democracy, social networking, user-created content, and mashups. The most likely import of these trends for mark holders is that the law will gradually slant towards more permissible “fair uses” and “nominative uses” of trademarks. We see this already in mashups, which combine all sorts of content and corresponding trademarks in ways that were not necessarily intended by the mark holder.

This decentralized world requires a thoughtful and vigilant approach to licensing that embraces the marketing goal of promoting marks, while maintaining required quality control and source attribution features that create a mark’s value. It would not surprise me to see a trademark license with features similar to the Creative Commons copyright license evolve to address some of this need, where a mark holder could globally pre-authorize certain online, electronic uses and attempt to technologically monitor compliance.

The other major trend that continues unabated is an march toward further globalization. I believe that legal structures will continue to evolve towards a recognition of this reality. As a result, expect to see organizations such as WIPO grow in influence. The Madrid Protocol, UDRP proceedings, international arbitration and other non-country specific legal frameworks will continue to evolve.

As to enforcement, the Internet is a double-edged sword. I believe that the law will continue to evolve in a way that will be more tolerant of the difficulty of policing every infringement on the amorphous Internet. At the same time, the law will also evolve toward the recognition that technological measures of policing can make potential infringements easier to find. The failure by a mark holder to remain current with available policing methods will not sit well with the legal system.

Finally, one note on the enforce vs. ignore calculus in this Web 2.0 world. Beware of Pyrrhic victories, and consider “embrace” as a solution. If at all possible—and there are times it may not be—find a productive (probably licensed), mutually beneficial solution to online uses of your marks that you deem problematic. The goodwill you gain in mirroring the approach of the collaborative, participatory, democratic communities in which your marks are used, discussed, and even criticized will far outweigh the damage you can do with a victorious but unnecessarily acrimonious approach. It used to be said about newspapers that you “don’t pick a fight with people who buy ink by the barrel.” In the Web 2.0 world, everyone buys ink by the barrel.