Trademarks
The use of trademarks and service marks in cyberspace raises a number of novel issues.
False Designation
Trademarks may be infringed in cyberspace just as they are infringed in the "real" world: by using another's distinctive mark without their permission. In this sense, while new media provide new opportunities for infringement, the legal issues are not new. The reported cases involving false designation on-line have generally involved situations in which the principal claim was one of copyright infringement. Thus, in Playboy Enterprises v. Frena, 839 F. Supp. 1552 (M.D. Fla. 1993), the use of the Playboy trademark in file descriptions for digitized photographs culled from Playboy magazine was held to be infringing. In Sega Enterprises Ltd. v. MAPHIA, 857 F. Supp. 679 (N.D. Cal. 1994), the operators of the MAPHIA BBS were held liable for trademark infringement because they made games available for downloading, which, when played, displayed the Sega mark and logo. For a more extensive discussion of these and related cases, see our page on Copyright Liability of On-line Publishers.
Metatags
Operators of web sites are constantly devising methods to attract web surfers to their sites. One such method is the use of "metatags."
Many Internet search engines operate by searching for the appearance of a particular user-designated word or phrase in the text of web pages. Thus, if a user wanted to find sites dealing with legal topics, he or she might use a search engine and enter a search for the word "law." Many search engines will return a result which simply lists web sites according to the frequency of the appearance of the search phrase on the web page. Thus, in this example, the best "hit" from such a search engine might be a site which does not contain any legal information at all, but simply contains the word "law" appearing thousands of time on the page.
Realizing this, some webmasters now insert "metatags" on their pages in order to draw more search engine "hits." Metatags are pieces of text which are invisible to users of the site, but are read by search engines. Thus, a site which provides legal information and wants to make itself more "visible" to search engines might imbed metatags using words such as "law," "legal," or "lawyer" many times over.
From a legal perspective, there is nothing wrong with the use of metatags per se. (However, their use may run offend many users' sense of netiquette, particularly if the metatags are not really related to the subject matter of the site.) A legal problem does arise, however, if the terms used for metatags are the trademarks of another person or company. For example, in Playboy Enterprises Inc. v. Calvin Designer Label, Civ. No. C-97-3204 (N.D. Cal., Sept. 8, 1997), Playboy sued Calvin for using Playboy's trademarks on Calvin's web site. At issue were two types of trademark infringement: Calvin's use of the domain names "playboyxxx.com" and "playmatelive.com," and Calvin's imbedding of Playboy's trademarks as metatags on the Calvin site. The Judge in the case preliminarily enjoined both activities. He found that Calvin's "repeated use of the PLAYBOY trademark in machine readable code in Defendants' Internet Web pages so that the PLAYBOY trademark is accessible to individuals or Internet search engines which attempt to access Plaintiff under Playboy's registered trademark" made it quite likely that Playboy would ultimately prevail on the merits of its trademark infringement case. The Judge ordered Calvin to cease using Playboy's trademarks as a domain name or "in buried code or metatags."
Internet Domain Names
Domain names are assigned by the Internet Assigned Numbers Authority, which has delegated its duties to Internet Network Information Center, or InterNIC, which is operated by Network Solutions, Inc. InterNIC's domain name dispute policy has been the subject of a great deal of debate, and has been revised four times since August, 1995. The most recent version took effect on September 9, 1996. The basic principle is that second-level domain names are assigned on a first-come, first-served basis. The applicant must represent that it has the legal right to use the proposed name, and that its use will not violate any other entity's trademark rights. InterNIC reserves the right to revoke an assigned domain name upon thirty days written notice. InterNIC expressly states that it will not resolve domain name disputes itself, but does specify certain procedures to be followed in the event of a dispute. Among the requirements is that a trademark owner must first write a "warning letter" to a domain name owner which it alleges is infringing its trademark, specifying that it believes the domain name owner is violating the trademark holder's legal rights in the trademark. Upon sending a copy of the warning letter, as well as a certified copy of the trademark registration to InterNIC, InterNIC will cut off use of the domain name after thirty days. The trademark registration must predate the domain name, or recite a date of first use in commerce that predates the domain name. InterNIC will not take any action to terminate a domain name unless the trademark owner obtained the trademark registration prior to writing the warning letter. (This may be problematic in some situations, since it typically takes more than a year to obtain a trademark registration in the United States. This also prevents a domain name holder from rushing to get a quick trademark registration from a foreign country, as was possible under the old policy.) The full text of the new policy is available at Internic's web site.
Conflicts have arisen over the use of particular domain names. Only a few cases thus far have resulted in published opinions. The first one was MTV Networks v. Curry, 867 F. Supp. 202 (S.D.N.Y. 1994). In this case, Adam Curry, an MTV VJ, established "mtv.com" as an Internet site, allegedly with the permission of MTV. After Curry left MTV, the television station sued for trademark infringement, claiming that it had never given Curry its permission to use its name. The case was settled out of court, with MTV taking control of the domain name.
In a similar case which was resolved by private binding arbitration, Princeton Review, a standardized test preparation company registered the domain names "princeton.com" and "review.com," along with the name "kaplan.com." It used the kaplan.com site to publish materials unflattering to its competitor, Stanley H. Kaplan Educational Center. The case was eventually settled in Kaplan's favor.
It should be borne in mind that courts have not been hesitant to find jurisdiction in other so-called "cybersquatting" cases, even where the defendant did not take any actions directed toward the jurisdiction in which the plaintiff sues. These cases involve individuals who deliberately register a domain name using the trademark of another entity, with the goal of turning a quick profit by selling the domain name to the trademark holder. Though the cybersquatter may have no contacts whatsoever with the jurisdiction in which the trademark holder sues, and may in fact not be using the domain site for anything at all, courts have generally found that if the trademark holder brings suit in a jurisdiction in which it does business, the conduct of the cybersquatter will be held to have been specifically directed at that jurisdiction, since the purpose of the conduct was to extract a payment from the trademark holder, who was always doing business in that jurisdiction. See, e.g., Panavision v. Toeppen, 938 F. Supp 616 (C.D. Cal. 1996); Intermatic, Inc. v. Toeppen, 65 U.S.L.W. 2274, 1996 WL 622237 (N.D. Ill. Oct. 3, 1996). For more on jurisdictional issues, see our page What Jurisdiction Controls.
A question which trademark holders often face is whether or not to fight a cybersquatter, particularly if the trademark holder has no need for the domain name held by the cybersquatter. Of course, the argument against fighting is the cost involved. However, there are also good reasons to fight the cybersquatter, even if the trademark holder has not intent to use the domain name. First, a holder of a particularly strong mark may not wish to allow someone else to use a similar mark, even if there is no likelihood of confusing the squatter's products or services with those of the trademark holder (for example, the "Coca-cola power tools site."), because the unauthorized use might "dilute" the strength of the mark by associating it with other products (thus, Coca-cola would not argue that consumers are likely to think that the same company is selling soft drinks as is selling power tools, but Coca-cola would argue that if its mark were allowed to be used in this way, the name Coca-cola might eventually become no more distinctive than "Acme.") Another reason to fight cybersquatters is to avoid problems from traditional trademark infringers who may come along later and argue that the trademark in question is no longer entitled to protection, since it has been appropriated by others for use in domain names.
The recently enacted Federal Trademark Dilution Act, 15 U.S.C. 1125(c), provides trademark holders with a valuable new weapon against cybersquatters and others who would try to use the mark. This new law allows trademark holders to sue the cybersquatter for trademark infringement, even if there is no likelihood that the cybersquatter's site would be confused with the trademark holder, on the grounds that the squatter's use "dilutes" the distinctiveness of the trademark. This new law is relatively untested, but has been used successfully by trademark holders seeking to prevent others from using the trademark as a domain name in cases such as Intermatic, Inc. v. Toeppen, 65 U.S.L.W. 2274, 1996 WL 622237 (N.D. Ill. Oct. 3, 1996), Actmedia, Inc. v. Active Media Int'l, Inc., 1996 WL 399707 (D.C. Ill. July 17, 1996), and Hasbro, Inc. v. Internet Entertainment Group, Ltd., 40 U.S.P.Q.2d 1479 (W.D. Wash. 1996). The legislative history of the law makes it clear that Congress intended it to be used for (among other things) settling domain name disputes. During the debate on the law, Senator Leahy of Vermont noted that "[I]t is my hope that this anti-dilution statute can help stem the use of deceptive Internet addresses taken by those who are choosing marks that are associated with the products and reputations of others." Cong. Rec. 12/29/95, p. S19312. Many states have their own trademark dilution acts, which can also provide trademark holders with remedies against cybersquatters.
The Dilution Act did not help computer manufacturer Gateway 2000 obtain a preliminary injunction against the sole proprietor of a Raleigh, North Carolina consulting business called gateway.com, Inc. This gateway company had registered its domain name as gateway.com in 1988. The judge in that case found that gateway.com was not trying to profit on any confusion between the two business's names, nor were Gateway 2000's trademarks "famous" for the purposes of the Dilution Act at the time gateway.com was first registered. Therefore, the judge refused to grant Gateway 2000's request for a preliminary injunction against the use of the domain name.
Domain name disputes that are litigated on a trademark theory are also likely to run into other problems. For example, a necessary element of proving trademark infringement is that the infringer is engaged in commercial activity. Many cybersquatters simply register the name and do nothing else. While most courts have not yet addressed this issue, it is possible that the problem may be resolved on the theory that a cybersquatter who does nothing but wait to get paid for the domain name is engaged in commercial activity simply by the act of registering the name and "holding it for ransom." This was the court's holding in Panavision v. Toeppen, 938 F. Supp 616 (C.D. Cal. 1996). (What then of a prankster or a political activist who wants to hold onto a domain name simply to frustrate a company that it does not like, without any desire to sell the domain name?) Another problem is determining the appropriate remedy: in a trademark infringement case, the usual remedy is a court order that the infringer cease and desist from infringing on the mark, and that any products bearing the mark be destroyed. The trademark holder is not entitled to keep any infringing goods. In domain name disputes, however, the whole point is for the trademark holder to take the rights to the domain name. It may be that this remedy is not, strictly speaking, available under existing trademark laws.
It should be understood that many of these problems stem from a fundamental difference between the theories behind the ownership of domain names and trademarks. Under trademark law, two entities can hold trademarks for identical names or words, so long as they do not create consumer confusion. Thus, ABC can simultaneously be the trademark of a television station and the trademark of a furniture store. However, under the present domain name system, there can be only one "abc.com." Or, as we have seen, "Gateway" can be a legitimate business name of both a Fortune 500 computer manufacturer and an individual's computer consulting business, but there can be only one "gateway.com" domain name. While it is true that there are currently over 180 top-level domains, only ".com" is designated for commercial entities. (Other top-level domains are reserved for other types of entities. For example, ".org" for non-profit organizations, ".mil" for the U.S. military, ".fr" for France, etc.)
A partial solution to the problem may arrive if and when a proposal advanced by the International Ad Hoc Committee on the Internet on February 4, 1997 is adopted. The proposal would add seven new generic top-level domain names, or "gTLDs." The proposed new gTLDs are: ".firm," ".store," ".web," ".arts," ".rec," ".info," and ".nom." While this proposal may help the current situation, it is, of course, possible that an entity may feel that its activities could properly be categorized under several of the new gTLDs, and thus decide to register its name in several or all of the new gTLDs, leaving the fundamental domain name scarcity problem unresolved. A separate part of the IAHC proposal sets forth a scheme for creating international "domain name challenge panels" to arbitrate disputes. In the meantime, there may be no way for valid owners of the same trademark to use their marks as they might wish in Internet addresses. Thus, if the two ABC companies cannot otherwise reach an agreement, the first one to register may get "abc.com," while the other must settle for "abcnews.com" or "abctables.com," as the case may be.
A related problem with the domain name system is the question of who should have the authority to assign domain names. The IAHC proposal suggested that the seven new gTLDs should be administered by up to thirty new domain name registrars. In the meantime, an antitrust lawsuit against Network Solutions was brought by PGP Media, Inc. (no relation to Pretty Good Privacy) in March of 1997. The suit seeks to open access to the potentially lucrative domain name registration market by allowing access to NSI's computer facilities which control the allocation of domain names to TLDs.
Another good source of information about Internet domain name disputes can be found at the What's in a Name? page.