After filing over 275 lawsuits in almost 18 months, it seems as though Righthaven, LLC (“Righthaven”) may have run out of steam.

Righthaven, a Nevada holding company, was founded in early 2010, for the sole purpose of filing copyright lawsuits on behalf of its clients, news content owners (such as Stephens Media).  Its methods involved Righthaven scouring the Internet for republication of news articles and photos, suing the website hosting the infringing content (seeking monetary damages and the transfer of the infringer’s domain name), and then extending a settlement offer. Lawsuits filed by Righthaven have been brought against a wide variety of online publishers, including bloggers, political campaigns, nonprofits, and website operators — almost always without notice or DMCA takedown. Many cases settled swiftly, totaling an estimated $400,000 in aggregate settlement payment.  Righthaven’s founders claim they created the company in order to fight and deter “copyright theft” by bloggers and news aggregators online. Their aggressive enforcement strategies, including suing noncommercial bloggers and nonprofits who cannot afford to litigate, have also garnered much criticism, particularly from the Electronic Frontier Foundation. The critics have described the company as a “copyright troll” and a “settlement factory.”

In the past few months, Righthaven has suffered serious setbacks in the courts. In Righthaven v. Realty One Group, Inc. (D. Nev. Oct. 19, 2010), Righthaven sued a blogger for republication of 8 sentences from a 30-sentence Las Vegas Review-Journal article.  In a rare decision, the court granted the blogger’s fair use defense on a motion to dismiss.  The court noted that the blogger quoted a small percentage of the source article and his “use of the copyrighted material was likely to have little to no effect on the market for the copyrighted news article.” Another example is Righthaven v. DiBiase (D. Nev. April 15, 2011) in which Righthaven sought to have DiBiase’s domain name transferred to them.  In this case, the Court rejected transfer of the domain name stating that “Congress has never expressly granted plaintiffs in copyright infringement cases the right to seize control over the defendant’s website domain.”

Most notably, Righthaven suffered a particularly hard blow recently in Righthaven v. Democratic Underground (D. Nev. June 14, 2011).  In that case, the agreement between Righthaven and its clients, called a “Strategy Alliance Agreement,” was unsealed.  The agreement purported to assign copyrights to Righthaven for the purpose of filing infringement lawsuits, while exclusively licensing back all rights to the client, with Righthaven maintaining no rights, except the right to use. The judge dismissed the lawsuit on the ground that Righthaven had no standing to sue, stating that a “copyright owner cannot assign a bare right to sue,” essentially rejecting Righthaven’s business model. Over three-dozen other cases filed by Righthaven are being held up on appeal over the same issue.

Is it the end of Righthaven?  Most signs point to yes.  In the past two months, Righthaven has stopped filing new lawsuits, let cases lapse due to procedural defects and laid off a number of employees. Steve Gibson, CEO of Righthaven, stated they are awaiting the outcome of numerous appellate rulings in the Ninth Circuit Court of Appeals before resuming their efforts.

Regardless of what happens to Righthaven, this line of cases is particularly instructive in at least three ways:  first, they have allowed the emergence of blog-specific copyright cases and an expansion of the fair use doctrine, which Righthaven intentionally helped create (See Cobalt’s prior post on the topic: The Emerging Blog Specific Copyright Cases). Second, these cases are illustrative of how copyright owners from the traditional news world are continuing to struggle over how to best protect and monetize their content. Finally, the cases raise particularly interesting questions of copyright law relating to standing to sue and the validity of copyright assignments, for which we are awaiting clarification from the Ninth Circuit

In a decision handed down by the Court of Justice of the European Union on July 12, 2011, eBay has been found to be potentially jointly liable for trademark infringement along with individuals selling infringing goods on the eBay auction site because it had prior knowledge of the infringement.  Paris-based cosmetics company L’Oréal brought the complaint against eBay arguing that it is liable for trademark infringement because it is involved in the pre-sale, sale and after-sale processes of selling infringing products.  The Court agreed and held that an operator of an electronic marketplace that has provided active assistance in the sale of products rather than just taking a neutral position between the buyer and seller cannot be protected by the European Union’s e-commerce law exemption which applies only to parties playing a neutral online role.

eBay purchased keywords from online advertising services, such as Google Adwords, that included registered trademarks in order to direct potential customers seeking to purchase those goods to its website.   However, the goods being sold included both legitimate goods as well as counterfeit and unpackaged goods from non-European Economic Area (EEA) countries thereby infringing upon L’Oréal’s trademarks.  eBay implemented its own precautions against infringement by incorporating a take-down notification system and operating a Verified Rights Owner Program (VERO), however L’Oréal was not a member of the VERO program and rather turned directly to eBay for assistance with handling the infringing goods.  However, unsatisfied with eBay’s response, L’Oréal pursued its action before the High Court of England and Wales which referred several questions to the European Court.

In addition to joint liability, the Court considered the extent of injunctive relief that intellectual property owners could obtain against online intermediary websites, such as eBay, whose services are used as tools to infringe upon the IP of others.  The Court found that it could impose injunctions against online marketplaces requiring them to suspend accounts of those utilizing the site to sell fraudulently-marked goods or to employ measures which would make it easier to identify infringers.  However, the injunction would not require the website to actively monitor all activity of the website or prevent the sale of all goods bearing a particular trademark.

By finding eBay liable for joint liability, the European court differs from cases upheld in the United States.

In the Tiffany (NJ) Inc. v. eBay, Inc., cases in the federal district courts in New York, the federal courts rejected Tiffany’s argument that an intermediary website may have secondary liability thrust upon it if it has “generalized” information that its website was being used to sell infringing merchandise.  The court deduced in Tiffany that even though eBay had general knowledge of infringement by various sellers, it did not require eBay to prevent the same sellers from selling goods via their eBay accounts because general knowledge of infringement is insufficient to determine that actual infringement occurred.  eBay would have been liable, based upon Inwood Labs., Inc. v. Ives Labs., Inc. 456 U.S. 844 (1982) if it continued offering its services to sellers it knew or had reason to know were infringing on the mark’s holder’s marks.

Practical Considerations

What does this decision mean for clients who operate websites used or accessed from the European Union?

This decision suggests that, in the E.U., website owners might consider taking a more active role in addressing and preventing infringement upon learning of potential infringement from a trademark holder.  Indeed,  although an exemption from liability exists under the European E-Commerce Directive, any active role by the website owner in promoting items for sale by users may negate this exemption.

The California State Senate votes today on the passage of SB761, introduced by State Senator Alan Lowenthal (D-Long Beach), that would require the state attorney general to adopt regulations allowing users to opt-out of programs that track online information and identifying user behavior on computers, smartphones, tablet computers, and any other device that accesses the Internet.  Under SB761, any Internet user can send a message to a website doing business in California requesting that their online activity not be monitored.  The bill would allow consumers or the state attorney general to file a civil lawsuit against a company or website that ignores or violates this law. This law would be the first one of its kind nationwide and is based upon a similar federal bill introduced into Congress by Rep. Jackie Speier (D-CA).

Specifically, the proposed law prohibits any software to be copied onto a computer, without the prior approval of the user, and using the software to:

1. take control of the computer;
2. modify certain settings relating to the computer’s access to or use of the Internet;
3. collect, through intentionally deceptive means, personally identifiable information;
4. prevent, without authorization, an authorized user’s reasonable efforts to block the installation of or disabling of software;
5. intentionally misrepresent that the software will be uninstalled or disabled by an authorized user’s action; or
6. through intentionally deceptive means, remove, disable, or render inoperative security, antispyware, or antivirus software installed on the computer.

Although, at first glance, this proposed bill seems to benefit all Internet users, there lies the risk that this is the first step towards a user-fee-based Internet.  The business model of many of today’s websites is based upon advertising sales and the sale of personal data collected from users accessing their sites.  Advertisers seek this personal data in order to better understand the behaviors of their target audience resulting in enhanced access to their potential consumer base through a more strategic placement of ads.  Without the sale of this collected data as well as reduced advertising sales, websites will begin to see a decline in revenue and will require a new method of generating funds in order to replace these financial losses.  Therefore, we anticipate that websites will begin require users to pay a fee for the privilege of accessing websites and information that they were accustomed to access for free and, in exchange, websites would not collect or disseminate any user data.  This type of behavior will result in a “digital divide” in which those who have the financial means to pay for access will have better choices for an enhanced ad-free and tracking-free online experience.  Those without will have no choice but to give-up personal data in order to access lower quality websites or potentially not be allowed to access these websites at all.  By limiting Internet access to those that have the financial means to pay for services, there lies the question of whether Internet access is an inalienable right thereby allowing this type of digital divide without violation of any federal law.

On the flipside, without the passage of SB761, websites will continue to track user behavior and collect highly-invasive psychographic data resulting in an invasion or privacy.  As seen by the recent fury directed at Apple for tracking and storing the location of iPhone users, consumers need to have some type of protection against websites or option to restrict data collection from websites that will take advantage of unwitting Internet users without some type of restriction.  Therefore the passage of the law is the appropriate first step towards providing online users with appropriate options.

Practice Tips

While the public is rightfully concerned about online data collection and the sale of information to advertisers, companies need to be able to protect themselves and continue to generate revenue while still balancing the needs of the online consumer.  Companies with an online presence, especially start-up companies, need to determine the types of safeguards needed to be incorporated to protect themselves and their users and still succeed in generating revenue.  If companies engage in tracking practices and behavior, it is important to determine how to incorporate such practices and divulge this information in the privacy policies.  Disclosure is key but the ramifications of not being tracked needs to be divulged as well.

Agence France Presse v. Morel, (Jan. 14, 2011, S.D.N.Y.)

Agence France Press, Turner Broadcasting/CNN, ABC, Getty Images and CBS are suing Daniel Morel after Morel claimed that the news sites stole his images from Twitter immediately after the Haiti earthquake.

Twitter’s terms of service granted a license to use content only to Twitter and its partners. Moreover, AFP and TBS failed to establish that they were intended third-party beneficiaries of Twitter’s terms of service. Morel’s allegations that AFP knew that the images were his, disregarded his rights, and licensed Morel’s images to third-parties were sufficient to plead knowledge and inducement of infringement. Morel never uploaded images on Twitter. Instead, he used a third-party service called TwitPic, which says in its terms and conditions that the images posted remain the property of their owners. Morel used Twitter only to post a link to his TwitPic images. However the court held that Morel failed to allege facts supporting his claim that CBS had a direct financial interest in its affiliates’ exploitation of Morel’s images.

The Digital Millennium Copyright Act (DMCA) prohibits anyone from knowingly providing or distributing false copyright information with intent to “induce, enable, facilitate or conceal infringement.” Morel claims that AFP falsified and removed his copyright information from his images.

“Morel set forth a factual basis for alleging that AFP knew the copyright management information was false and intended to facilitate infringement,” Pauley wrote. In particular, an AFP editor viewed Morel’s images before AFP took identical images from Suero’s Twitpic feed. AFP also knew Morel was a professional photographer “and had no reason to believe Suero took the photos. However, AFP credited Suero without inquiry,” District Court Judge Pauley explained.

The court rejected AFP’s argument that it didn’t remove copyright management information (CMI) in violation of the DMCA. AFP says the DMCA stipulates that CMI must be removed from the photograph itself. But the DMCA “imposes no such requirement,” Pauley said. CMI includes information conveyed in connection with the work in question, and not just information on the work itself.

“It is implausible that a viewer of Morel’s photos would not understand the designation ‘Morel’ and ‘by photomorel’ appearing next to the images to refer to authorship,” Pauley wrote. Regarding Morel’s claim for violation of the Digital Millennium Copyright Act, the notations “Morel,” “daniel morel,” and “photomorel” fell within the scope of copyright management information under the plain language of the statute.

Hard to believe that the last California statute prohibiting impersonation dates back to 1872. SB 1411, a bill passed last June, updates the law and makes malicious “e-personation” a misdemeanor punishable by up to a $1,000 fine and a year in county jail. It is codified at Penal Code Section 528.5.

More specifically, the new law makes unlawful to “knowingly and without consent credibly impersonate another actual person through or on an Internet Web site or by other electronic means … for purposes of harming, intimidating, threatening, or defrauding another person.” Emphasis Added. In addition to criminal penalties, the law expressly provides ground to bring a civil suit for compensatory damages, injunctive relief or other equitable relief to anyone who suffers damage or loss as a result of the online impersonation. Other states (like New York and Texas) already have similar laws on the books.

Practice Note: Attorneys who represent celebrities and victims of online harassment and identity theft will particularly want to know about this law, which adds to the arsenal of remedies against California impersonators. Also good to know: If you are dealing with imposters on Facebook, MySpace, Twitter, eBay or other prominent sites, you can usually get the fake account deleted fairly expeditiously by using the site’s take-down mechanism. Many sites now have such procedures in place, not only for DMCA purposes, but also to request deletion of abusive or fake pages.

Finally, it is important to note that the new California law only targets “credible” impersonators of an “actual person.” @ChuckNorris_ and @drtobiasfunke are probably safe.

Like Verizon did last year on the same day, Google has announced that it is changing its company name to Topeka. From a trademark law perspective, Google is acutely aware that the public must be educated on proper use of its new mark, so as to lower the risk that TOPEKA might become generic and lose its trademark status as so many marks have before it (such as cellophane, escalator or aspirin). To that end, the Google has posted these helpful trademark usage guidelines:

Further information about the TOPEKA re-branding effort is available here.

Netflix, the web based DVD rental service, launched as contest in 2006 offering a 1 million dollar prize to team that develops a recommendation algorithm that is shown to be 10% better that Netflix’s current recommendation engine. To those in the programming community, the challenge has been compared to scaling Mount Everest. Has the summit been reached?

It seems the two contest front runners, Team Pragmatic Theory and Team Bellkor in BigChaos, have joined forces and submitted an algorithm that was 10.05 percent better than the one Netflix uses to recommend movies to its subscribers. The result was published on the Netflix Prize leader board on June 26, 2009.

From a promotion law point of view, the contest winner must grant to Netflix, an irrevocable, royalty free, worldwide non-exclusive license under the contest entrant’s copyrights, patents or other intellectual property rights in the winning algorithm. In addition, a description of the algorithm, but not the source code, will be published on the Netflix site. I.e., the winners will “describe to the world how [they] did it and why it works.” Like all well conceived contests, the official rules provide a mechanism for determining the contest entrants actually created the entry submitted. It appears however, that the winners are not prohibited patenting their entry and winners are not prohibited from charging others for the use the algorithm.

This contest, where competitive incentives are offered as an alternative to in-house research and development, looks like a new, workable model to foster innovation.

St. Louis Cardinals manager Tony La Russa has sued Twitter, the popular micro-blogging service in San Francisco Superior Court alleging: Trademark Infringement, False Designation of Origin, Trademark Dilution, Cybersquatting, Misappropriation of Name, and Misappropriation of Likeness. In the Complaint, Mr. La Russa states the defendant owns the domain name twitter.com, and pursuant thereto, twitter.com/TonyLaRussa. Mr. La Russa contends an unknown user, pretending to be La Russa, began posting updates as Mr. La Russa. One line of the “profile” suggested it was all a fake: “Bio Parodies are fun for everyone.”

According to the San Francisco Chronicle, La Russa’s attorney tried to contact Twitter before filing the lawsuit, but got no response. Hours after the lawsuit was filed, Twitter removed the fake La Russa page and its postings. It is being reported that the case has already settled. “La Russa said Friday [6/5/09] that Twitter has agreed to pay legal fees and make a donation to his Animal Rescue Foundation. The organization is likely to take control of the name www.twitter.com/TonyLaRussa. However, the Wall Street Journal is reporting the opposite.

The truth is out there.

Trademark Note: Using a trademark and then simply claiming “parody” is not a “get outta jail free card.” In trademark cases, when a parody defense is raised, the defendant justifies his use on the grounds of humorous social comment. Funny or not, a defendant’s use may still be enjoined if it is likely to cause confusion with plaintiff’s trademark. Courts must balance the public interest in poking fun at trademarks and the institutions they represent, with the trademark owner’s investment and good will. Courts must also protect consumers from likely confusion.

As of last Saturday, Facebook users have been able to register personalized URLs of their choice for their Facebook home page (e.g., facebook.com/myusername). Approximately 5.75 million users signed up for their own URL over the weekend (also called “Vanity URLs”).

These new usernames could potentially be anything, including someone else’s trademark. To help trademark owners prevent hijacking of their marks, Facebook put in place a temporary procedure for trademark owners to “reserve” their registered trademarks with Facebook in advance and prevent the creation of URLs associated with those marks. Facebook has now closed this reservation period.

So what can trademark owners do who did not register their trademarks with Facebook and discover unauthorized URLs? They can request removal by contacting Facebook via this notice form. The procedure is fairly straightforward. You do not need to be registered on Facebook to use it.

So go to Facebook, check possible URLs containing your marks and, if you discover unauthorized uses, take action sooner rather than later.

Commentary: “What do I care about what some narcissistic idiot had for breakfast? Twitter is the dumbest thing I’ve seen on the Internet so far.” That’s the response I got from an attorney after I mentioned how much I rely on Twitter.

His most recent exposure had been the friendly Twitter war between CNN host Larry King and actor Ashton Kutcher, but his grand daughters each had accounts, so he was all too familiar with inane comments about cute boys and lunchroom antics, and thought that’s all there was. He was shocked to discover many in the non-celebrity, over 40 crowd were actually using it, and reaping benefit.

I won’t go into detail about how Twitter works, except to say the site allows you 140 characters to micro-blog a single thought. Neither will I delve into the numerous macro-blogs that at least partially credit Twitter for successful political events done on short notice. I will say this: Increasingly, Twitter is being used by busy professionals to aggregate information in one place rather than spend time surfing the web to find it. The last thing I need is another website to check, but Twitter has become the ultimate lazy attorney’s reference, because other people do my research for me and serve it up in one place.

For instance, my first morning stop at work (after tea) is my Twitter page, where I follow legal bloggers (for case law updates), news tweets, sports, and grocery stores (for coupons – like I said, “one stop shopping”). Sure, I get the occasional “tweet” about what someone had for breakfast, but the benefit having what I need in one place outweighs the inconvenience – if any – of an occasional social tweet (and lightens my day).

Companies like Whole Foods use the micro-blog site to drive traffic to their own website and alert shoppers to specials. Organizations like CNN simply feed breaking headlines; the company does not even post a link (not enough room). I’m up to date in 5 minutes and spend more time on the articles and issues I really want to understand. If I wanted to, I could even find my congressperson (I don’t). Parents even get some benefit out of it (I’ll leave it to the reader to figure out why).

I’m not worried that Twitter is going to become a bastion of moral decay either. There are always bad actors in any environment (except of course the legal profession). Already, sites like Tweeting Too Hard and Curse Bird are curbing behavior. Moreover, because I pick and choose what I want to see, I don’t have to look at anything that offends me: unlike an RSS or other news feed, I can turn off and on who I follow at any time.

Social media still has some kinks to work out legally. For instance, should employers have policies about what people say on Twitter when they’re on or off the clock? Should an attorney representing a client try to “friend” an adverse party to get access to statements? Can service of process be affected on Facebook. To be sure, we’re in the gold rush phase of the technology. But the sky is not falling, and if Barbara Boxer can tweet, you’re late to the party.

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A new website has launched whose purpose is to connect potential buyers and sellers of trademarks. Trademarks are words, signs or symbols used by businesses as a source identifier of goods and and services. Trademarks are valuable not only for the consumer goodwill they engender (see, MCDONALD’S, GOOGLE, BMW, HBO), but also as a barrier to market entry of similar products (or services) with confusingly similar trademarks.

According to its press release:

USTrademarkExchange.com was launched earlier this month as a dedicated trademark sales portal . . . Owners can list and promote their registered trademarks, while potential buyers including investors can easily search through a variety of available trademarks in one location.”

Sounds like a great idea, right? Hmmm, not so fast. There are a few basic, but important concepts worth noting. When a trademark is assigned (ownership transferred) from one party to another, the purchasor generally succeeds to all of the previous owner’s rights (e.g., dates of first use, etc.). However, a maxim of trademark law states a valid trademark assignment must include the goodwill of the business. What is goodwill?

A trademark stands for a certain standard of quality. The mark symbolized that level of quality that the public has come to associate with the products bearing the mark. That said, an assignee (or purchasor) of a trademark must be sure she has the implements necessary to maintain this quality. If she does not, the trademark becomes separated from its goodwill. When goodwill does not accompany the mark, the assignment may be called an assignment in gross or a naked assignment. Generally speaking, an assignment without goodwill is invalid.

It is too soon to tell how USTrademarkExchange.com intends to handle its trademark assignments and how potential buyers and sellers will see the benefits of their respective bargains. Like many things in life, “an ounce of prevention is worth a pound of cure.” When it comes to assigning or purchasing trademarks, conferring with competent trademark counsel is always a good bet.

Linden Labs, the host of the immensely popular site Second Life, an online virtual world, has been sued in an Arizona district court for trademark infringement and unfair competition. The complaint, filed by Taser International, makers of non-lethal (and sometimes lethal) weapons, claims Linden Labs allows third parties to sell TASER guns inside the virtual world.

Just so we’re clear, no one on Second Life is actively selling real TASER guns; rather Taser is suing Linden (who doesn’t sell anything), for letting people sell virtual (digitally created) guns that look like TASER weapons, and that use the TASER brand. The suit also alleges unfair competition, trade dress infringement, and false designation of origin, among other claims.

For those uninitiated few, users of the Second Life world can use their credit card to buy digital currency (“Linden Dollars”). They can then use that currency to make purchases in Second Life. For instance, if a user would like to dress up his/her avatar in a ball gown, s/he can use the Linden Dollars to shop at a virtual prom store. Similarly, if a user wants “protection” (you know, from digital thugs), s/he can buy a virtual weapon. Linden gets its revenue from a small percentage taken during the currency exchange.

It’s not the first time a company has sued Linden; neither is it the first time a company has sued a hosting site for trademark infringement by third parties (think: Google). It may, however, be the first time a company has sued another company for hosting a site where third parties selling products that aren’t even real. Is it time for a Digital Millennium Trademark Act?

Practice Note: Notwithstanding the fact that there is no DMTMA, companies may want to consider adopting a policy that allows them to stay an arms length away from disputes between users when it comes to trademarks. It’s not a fail-safe method of safe harbor protection, but it may make would-be plaintiffs feel they have an option short of filing a lawsuit, for getting hard-to-find users to stop using their marks.

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The Coalinga Recorder and the local namesake high school were vindicated after the Court of Appeals in the Fifth District ruled that the paper’s reprinting of a tirade from a “MySpace” page was not an invasion of the page owner’s privacy. The court found that “the article was available to anyone with Internet access.”

Turns out Cynthia Moreno wanted the world to know how much she despised her home town of Coalinga, a small rural city in the Central Valley area of California. Moreno’s “Ode to Coalinga” was posted on her MySpace page after she graduated high school and was attending UC Berkeley.

Cynthia’s high school principal happened upon it during the Ode’s 6-day reign of terror on her MySpace page and immediately forwarded it to an editor at the Coalinga Recorder. It was subsequently published in the Letters section.

The Ode did not sit well with the local folks who, according to the complaint filed by Moreno and her parents, began their own reign of terror on the Morenos (who still lived in Coalinga), threatening death, and firing shots at the house. Hatred was so fierce, the Moreno family business had to shut down because no one would patronize it. In fact, they had to leave town, and subsequently sued the paper, the parent publisher, and the school district for invasion of privacy and intentional infliction of emotional distress.

In affirming the lower court’s decision to dismiss the “invasion of privacy” portion of the complaint, the Court noted, “Cynthia’s affirmative act made her article available to any person with a computer and, thus, opened it to the public eye. Under these circumstances, no reasonable person would have had an expectation of privacy regarding the published material.” The court found unpersuasive Moreno’s argument that the girl never fully identified herself on the MySpace page in question, noting that her photograph and first name were sufficient to identify her as the author.

Practice Note: Increasingly, we are seeing postings on social networking sites being used in various ways in litigation. We are aware of several cases wherein a party has used a witness’ MySpace or FaceBook postings to impeach testimony. Companies may wish to consider policies regarding employee use of social media. As recently as today, according to CNET news an employee was fired for calling in sick (saying she needed to be in a dark room away from her monitor) and subsequently “FaceBooking” on the computer.

Personal Note: Mama, don’t let your babies grow up to be (irresponsible) Tweeters! In addition to litigation, increasingly, college admissions directors are surfing the Internet to see if there are vast distinctions between what they are reading in applications and the actual person. Social networking is a fine way to stay connected and show one’s unique personality, but parents must teach their children to be responsible about what they post and who they befriend. Children should be advised that digital information doesn’t disappear simply because it’s old, or because they remove it. A screen shot can easily be taken of anyone’s public information, without knowledge of the posting party. What happens in cyberspace really does stay there forever.

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With U.S. President Barack Obama in the White House a change in U.S. – Cuba relations may be on the horizon. According to a recent Reuters story, U.S. companies have an estimated 5,000 products trademarked in Cuba, “waiting for the day they might finally land on the island separated from the United States by the Florida Straits and a vast ideological gulf.” Indeed, as recently as December 2008, the Cuban Office of Intellectual Property registered trademarks for new products for Coca-Cola, Google, and Ford Motor Co.

Hasn’t the United States imposed a commercial, economic, and financial embargo against Cuba since the early 1960s? Yes, but under the Clinton administration an exception was enacted exclusively for the protection of trademarks, patents, commercial names, copyrights belonging to U.S. individuals or corporations. Thus, U.S. trademarks and other IP is can be protected under Cuban law. Likewise, U.S. government will protect intellectual property assets belonging to the Cuban government.

While trademark applications filed in Cuba by U.S. companies fell by 36 percent during the George W. Bush administration, under Mr. Obama’s administration U.S. companies are sensing new market opportunities. Mr. Obama is the first U.S. president in half a century who has evidenced a willingness to talk with Cuba’s leaders, and he has promised to ease the trade embargo.

Right now, U.S. trade groups are trying to avoid a repeat of events that occurred in South Africa, following the end of apartheid. There U.S. companies found their trademarks had been registered by someone else. Fortunately, Cuban authorities have honored trademarks and awarded rights to legitimate owners.

For those U.S. companies believing “change” may involve a thawing of economic relations between the governments of Cuba and the U.S., then further discussions with your trademark counsel is warranted.

This is big news in the world of internet domain names. Trademark holders have expressed concerns about ICANN’s decision to soon allow custom Top-Level Domains (e.g., .google, .disney, .newyork, .cars, etc.). Companies and other interested parties now have a bit more time to prepare for the change and decide whether to apply for new Top-Level Domains themselves, including domains that may contain their trademarks. The public will also have an opportunity to make further comments to the proposal this Summer.

Top-Level Domains (TLDs) are the portion of a domain name that is to the right of the dot (e.g., .net, .com, etc.). TLDs that are not country codes (e.g., .cn or .uk), are called generic TLDs (gTLDs). ICANN is the body that approves and recommends new gTLDs.

Currently, TLDs are limited to 21 generic top-level domains (like .net, .com, .org or .info). After allowing a few limited expansions (for example, .mobi), ICANN announced last year that it would dramatically expand this system and allow custom gTLD, subject to an elaborate application and evaluation procedure (and, of course, a fee). The new gTLDs can consist of almost anything, including trademarks, geographic locations and generic terms, as well as non-Roman characters. Applicants will have a limited time period to apply for new gTLDs.

The official launch of the program was originally planned for June 2009. After receiving a number of objections and comments from trademark holders and the business community, ICANN just announced that it will delay the program until at least December 2009. A committee is evaluating, and developing solutions in response to the “overreaching issues” with the program. Some of those concerns include: skyrocketing costs for trademark holders, and increased opportunities for malicious behavior and infringement online.

So what’s next? A further report and draft guidebook are scheduled to be published by ICANN in May and June 2009, at which point a new comment period will open. Under the current schedule, it appears that the publication of the “Final Application Guidebook” is planned for December 2009 or the first quarter of 2010. Applications for new gTLDs will be open for 45 days from that date.

Further information is available on the ICANN web site

A little something from Doug:

I received a last minute call the other day from a boyhood friend inviting me to see the band AC/DC in concert at the Oracle Arena in Oakland, CA. Needless to say, I jumped at the opportunity. Why? On one hand, I’ve never seen AC/DC live. Say what you will, but any band that can sell out two shows at a modern basketball arena, some 35 years after their founding, must be doing something right. Indeed, since forming in 1973, AC/DC has achieved global sales totaling more than 150 million albums. Moreover, AC/DC is Sony BMG Music’s best-selling catalog act worldwide, selling nearly 70 million albums in the U.S. alone. On the other hand, I was also interested in AC/DC the “brand.” Would my interest have been as piqued if our seats were in, say, section 213, rather than in a catered club level luxury suite with preferred parking?? Does Angus Young wear corduroy shorts???

Arriving at the Arena parking lot the first thing I noticed was the T-shirts. Everyone seemed to have a unique AC/DC concert shirt. A badge of honor amongst concert veterans. Consistent, however, in these t-shirts was the prominent placement of the the recognizable AC/DC logo. Seeing that prominent AC/DC logo got me thinking about, and looking at, all of the band’s merchandise for sale, emblazoned with its unique logo.

It is evident that AC/DC understands the power of its logo and the goodwill associated therewith. In addition to T-shirts (designs for men, women, and children), on sale at the venue were: AC/DC posters and stickers, AC/DC jackets and outerwear, AC/DC hats, AC/DC magnets and key chains, AC/DC 2009 wall calendars, and AC/DC tour programs. Interestingly, AC/DC currently maintains U.S. trademark registrations in only International Classes 016, 025, and 026. These registrations are for the AC/DC Logo design mark, and not the standard word mark. While these registrations provide the band significant protection, and the band certainly has significant common law protection, there are some categories of goods and services the band could consider.

For example, AC/DC maintains a fairly elaborate website, yet does not maintain a U.S. registration in Class 041. The website offers streaming audio and video, but the band is not registered in Class 038. Of course, as their bread and butter, AC/DC sells CD, DVDs, and video game cartridges and discs, yet the band has no registration in Class 009. The band sells tote bags, luggage tags, and doggie sweaters in Class 18, and ashtrays in Class 034, all without U.S. trademark registrations. Big deal, you say . . . who’s gonna rip off AC/DC’s trademark? There’s an old saying, “an ounce of prevention is worth a pound of cure.” One need only look at AC/DC’s metal brethren METALLICA, and its numerous trademark registrations, to see what a few ounces of prevention is worth.

“Angus, baby, call me . . . we’ll do lunch. Have you thought about AC/DC air fresheners in Class 005?”

Note from Tsan: Except as related to information pertaining to the practice of trademark law and expansion of brand protection, the views expressed herein (including without limitation the reference to the band as legendary) do not necessarily reflect the position of Cobalt or Doug’s colleagues.

Blockbuster may not be able to rely on the what I learned in Kindergarten defense when it answers charges it illegally shared a plaintiff’s movie preferences with third parties. In a suit filed in Texas earlier this month, Cathryn Harris sued Blockbuster for sharing her rental history on Facebook.

The suit, which is currently seeking class action status, claims Blockbuster’s actions of feeding renters video choices to a news feed violate the Videotape Privacy Protection Act, (“VPPA”) which states in relevant part that a video tape service provider is liable under the VPPA if that provider knowingly discloses personally identifiable information without the renter’s “informed, written consent.” Harris contends the online “opt out” options she was given did not constitute her informed written consent as intended by the VPPA.

The sharing comes as a result of Blockbuster’s participation in the Beacon advertising program, which has received considerable attention and criticism from consumer activist groups and corporations over the past 18 months. Beacon is a form of “social advertising” that allows Facebook friends to see your purchases (as well as other transactions you make) through news feeds. After considerable controversy, Facebook changed the “opt out” provision to an “opt in” provision, so that users would not inadvertently share their personal information simply by accepting the use agreement. Even so, last year, Coca-Cola announced it would not be participating in the program, as did Overstock.com and several other companies, citing privacy concerns. For instance, research showed that participating companies were sending information to Facebook even for buyers who were not Facebook members. Although Facebook claims it deletes such information if and when it is received, many partner sites determined the program contained too many privacy problems for them to feel comfortable participating.

The VPPA was enacted in 1987. It is rarely cited and was clearly not created with the sort of digital transmission of private information in mind that happens today. In fact, the VPPA was enacted after Robert Bork’s video rental history was published during his Supreme Court nomination hearings.

Practice Note: Privacy policies are tricky things. Clients should be advised to create policies that they can follow. Any updates to a privacy policy, particularly ones that will change the way a user’s information is shared, should be highlighted in bold.

If u cn rd ths, then you’re either over 50 and remember the old shorthand print ads, or you use your phone to text messages. Amazon continues to push the digital envelope, recently launching its Text-To-Buy program. Adding to its existing mobile phone program (launched last Fall), consumers can set up an account online and then text the UPC, ISBN number, or even a keyword to AMAZON” (262966), and make purchases.

Text-to-buy is likely to pick up speed over the next year, with online and brick-and-mortar companies expanding their clientele and extending their shopping hours by allowing consumers to text purchases, either for pick-up or delivery.

Practice Note: Clients who want to add mobile interaction to their online sites should update their privacy and terms of use policies. The federal CAN-SPAM Act applies to all mobile devices.

Jacobsen v. Katzer, No. C06-01905 JSW, 2007 U.S. Dist. LEXIS 63568 (N.D. Ca. August 17, 2007)

This little case about model railroad software addresses a debated issue in the open source community: on what basis can open source creators sue people who misuse their work. This case seems to suggest breach of contract is an available remedy, but not copyright infringement. The case also deals with copyright law preemption.

Plaintiff developed model train software made available on this online community. Plaintiff’s work was subject to a standard open source software license permitting members of the public to make copies, distribute and make derivative works, providing they gave credit to the creators. Plaintiff alleged that defendants used plaintiff’s software to develop and fraudulently patent their own software for model train enthusiasts. Plaintiff sued on a number of counts and moved for a preliminary injunction to enjoin defendants from willfully infringing plaintiff’s copyrighted materials.

The court first held that plaintiff’s claims of unfair competition and unjust enrichment were preempted by federal copyright law, as both counts dealt “exclusively” with the misappropriation of plaintiff’s copyrighted files, a subject matter within the Copyright Act. To survive preemption the state claims must protect different rights than copyright rights. The state claims here did not add the required “extra element” to change the nature of the action or the rights secured under copyright law.

The court then denied plaintiff’s injunction, stating that plaintiff’s claims sounded in contract, not copyright. The court held that, implicit in a non-exclusive license like this one was a promise not to sue for copyright infringement. That is not to say that a licensor may never sue for copyright infringement, but they may only do so when the licensee exceeds the scope of the license. In this case, the license, like all open source licenses, was intentionally broad, closing the door to a copyright claim.

The Children’s Advertising Review Unit (“CARU”) has reached an agreement with Roca Wear, a children’s clothing line, to discontinue showcasing its website on advertisements directed at children.

Roca Wear produced an advertisement that appeared in the April 2005 print edition of Nickelodeon Magazine, which is exclusively directed at children. In the ad, Roca Wear prominently displays its web site and encourages readers to visit. The site is not designed for children in particular, but given the circulation of advertising, it is clear that children will visit the site. As a consequence, the site could, in theory, collect personally identifiable information from children without parental permission. Roca Wear has agreed to remove references to its web site in future advertising directed at children.

Practice pointer: If companies know (or have a reasonable expectation) that children may be visiting their website and registering with personal information, simply removing advertising may not be enough. Companies that have a prominent web presence will have to institute “neutral screening procedures” in order to filter out children under 13 and keep from contaminating their database. Merely because a web site is not directed at children does not mean children do not visit the site. Any site that has a “registration” process and is reasonably likely to attract children should institute a neutral screening process.