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Emerging Trademark Threat @ Twitter,Facebook, MySpace

Policing and Protecting Against Brand Infringement by Social Networking Website Users

presents

Today's panel features:Ian C. Ballon, Shareholder, Greenberg Traurig, Santa Monica, Calif.

Jennifer L. Barry, Latham & Watkins, San DiegoPaul W. Garrity, Partner, Kelley Drye & Warren, New York

Thursday, October 1, 2009

The conference begins at:1 pm Eastern12 pm Central

11 am Mountain10 am Pacific

The audio portion of this conference will be accessible by telephone only. Please refer to the dial in instructions emailed to registrants to access the audio portion of the conference.

A Live 90-Minute Teleconference/Webinar with Interactive Q&A

Emerging Trademark Threat@ Twitter, Facebook, MySpace

Presented By:Ian Ballon, Greenberg Traurig

Jennifer Barry, Latham & Watkins LLPPaul Garrity, Kelley Drye

October 1, 2009

2

Agenda

Current IP trends surrounding Twitter, Facebook and MySpace

Infringement risks arising from social networking sites

Issues of secondary liability

Best practices to protect brands

Q&A

3

Current IP Trends

Social networking sites can actually be useful for business Celebrities Business advertising

http://twitter.com/starbucks (295k+ followers) http://www.facebook.com/costplusworldmarket (7,700

fans) Exposure for company’s leader/personality Networking/BD Small business infrastructure

4

Current IP Trends

With any opportunity, of course, comes risk Expense

Content and graphics Personnel Legal issues

Overload Too many sites! LinkedIn, Flickr, YouTube, WordPress, Digg . . .

Infringement Our central topic today

5

LaRussa v. Twitter—Username Litigation Tony LaRussa is a well-known

baseball manager who currently manages the St. Louis Cardinals.

An unknown party registered the Twitter username Tony LaRussa and used it to post off-color comments about current and former Cardinals players.

LaRussa sued, claiming trademark infringement, cybersquatting, and violation of right of publicity.

Case settled shortly after filing, with the username being disabled and turned over to LaRussa.

May have been a monetary payment to LaRussa or his charities as well.

6

Oneok v. Twitter—Username Litigation Oneok is an energy services

company, and owns a registered trademark for ONEOK.

Twitter registered the username ONEOK to another party, which posted information about Oneok.

Complaint was dismissed almost immediately.

ONEOK Twitter username is now down—this may be because of settlement.

7

Two Routes To Attacking False Domain Names Both require proving that plaintiff owns valid

trademark, and that defendant using something similar to that mark.

Trademark Infringement Must prove likelihood of confusion Primary remedy is injunctive relief.

Cybersquatting claim Must prove bad faith in registering domain. Provides for statutory damages.

8

Cybersquatting Remedy

Anti-Cybersquatting Consumer Protection Act, 15 U.S.C. § 1125(d), creates ability to sue in rem for recovery of a domain name where: Domain name is “identical or confusingly

similar” to a valid trademark. Domain name was registered with “bad faith

intent to profit.” No need to prove likelihood of confusion.

Unclear if the “domain name” language would reach social networking usernames.

9

Use of ACPA to Reclaim Domain Names People for Ethical Treatment of Animals v.

Doughney, 263 F.3d 359 (4th Cir. 2001) PETA.ORG violated PETA trademark

Virtual Works, Inc. v. Volkswagen of America, Inc., 238 F.3d 264 (4th Cir. 2001) VW.NET violated VW trademark

Baylor University v. Int’l Star, Inc., 2001 WL 1796464 (W.D. Tex. Nov. 7, 2001) BAYLORBEARS.COM violated BAYLOR

BEARS trademark

10

Courts’ Prior Views Of Domain Name Issues Knight-McConnell v. Cummins, 2004 WL 1713824

(S.D.N.Y. July 29, 2004) “[D]efendant's use of the plaintiff's name in the post-

domain path of a URL and placement of URLs using the plaintiff's name in the post-domain paths on chat forums, discussion boards, and search engines do not give rise to any source confusion.”

Interactive Prods. Corp. v. a2z Mobile Office Solutions, Inc., 326 F.3d 687, 696 (6th Cir. 2003) the post-domain path of a URL “merely shows how the

website's data is organized within the host computer's files” and does not suggest an association between page and mark holder

11

Lessons From Prior Cases

Courts may be skeptical of idea that usernames alone generate confusion.

This may particularly be the case if the content on those pages is clearly not sponsored by the brand owner.

12

Initial Interest Confusion

Initial interest confusion occurs when the defendant uses the plaintiff's trademark “in a manner calculated ‘to capture initial consumer attention, even though no actual sale is finally completed as a result of the confusion.’” Interstellar Starship Services, Ltd. v. Epix, Inc., 304 F.3d 936 (9th Cir. 2002)

This is typically the area at stake in Internet/social media cases, because the content on linked pages typically limits confusion.

13

Emerging Regulation Of Social Media

Food and Drug Administration Attorney General Actions

14

Food and Drug Administration

FDA has called a November 12-13 public hearing to discuss potential new rules concerning social media and FDA regulated products.

“Although the agency believes that many issues can be addressed through existing FDA regulations, special characteristics of Web 2.0 and other emerging technologies may require the agency to provide additional guidance to the industry on how the regulations should be applied.”

May serve as a template for other federal agencies’ efforts to regulate social media.

15

AG Actions--New York v. Lifestyle Lift

Lifestyle Lift is a cosmetic surgery provider, and was upset about negative reviews of their services posted on the Internet.

Lifestyle Lift directed its employees to pretend to be satisfiedcustomers and post positive reviews on the Internet.

Lifestyle Lift also created websites “designed to appear as if they were created by independent and satisfied customers of Lifestyle Lift. The sites offered positive narratives about the Lifestyle Lift experience.”

After AG investigation, Lifestyle Lift agreed to consent injunction against further conduct and $300,000 in penalties and costs to be paid to New York.

May serve as a template for subsequent actions against “astroturfing” on social media sites.

16

Injunctions Specifically Addressing Social Media Grooms v. Legge, 2009 WL 962067 (S.D. Cal. 2009)

Dispute over KNUKLE marks. Plaintiff gets preliminary injunction barring “the

unauthorized use of photographs, graphics, and designs bearing the Knukle Marks and/or Names whether published or not published including, the worldwide web, ‘www.knukleinc.com’, ‘www.knukleincclothing.com’, Facebook, MySpace, traditional media channels, word of mouth, or in any other type of marketing or advertising.”

Make sure to ask for this additional relief where appropriate/necessary.

17

Potential Counterfeiting on Twitter

Twitter Stream Promoting “Rolex” Links To Ebay Auction—Potential Counterfeit

18

Issues of Secondary Trademark Liability

No DMTABut the standards of liability are

tougher: Sony Corp. v. Universal City Studios, Inc., 464 U.S. 417, 439 n.19 (1984)

19

Issues of Secondary Trademark Liability Inwood Laboratories, Inc. v. Ives Laboratories,

Inc., 546 U.S. 844, 854 (1982) Liability may be imposed where a

manufacturer or distributor Intentionally induces another to infringe a

trademark or Continues to supply a product to someone

who the defendant knows or has reason to know is engaged in trademark infringement

Products or services? Hard Rock Café Licensing Corp. v.

Concession Services, Inc.. 955 F.2d 1143, 1148 (7th Cir. 1992).

20

Issues of Secondary Trademark Liability Tiffany (NJ) Inc. v. eBay, Inc., 576 F. Supp. 2d 463 (S.D.N.Y. 2008)

eBay does not take possession of goods; no allegation of inducement

Where liability is premised on the conduct of a user of a venue (as opposed to a manufacturer or distributor of a product) an initial threshold showing must be made that the defendant had direct control and monitoring over the means of infringement Lockheed Martin Corp. v. NSI, 194 F.3d 980 (9th Cir. 1999)

The standard is knowledge or reason to know, not reasonable anticipation

Liability must be premised on specific knowledge, not generalized knowledge Cease and desist or demand letters do not impute

knowledge. Cf. Copyright law eBay responded every time it received a notice A different result might obtain when the site or service is not

like eBay (i.e., a responsible site with extensive assistance toip rights owners): Louis Vuitton Malletier v. Akanoc Solutions, Inc., No. C 07-03952 JW (N.D. Cal. Dec. 23, 2008)

21

Other Claims vs. Service Providers -47 U.S.C. § 230

230(c)(1): No provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider

230(c)(2)(A): No liability on account of “any action voluntarily taken in good faith to restrict access to or availability of material that the provider or user considers to be obscene, lewd, lascivious, filthy, excessively violent, harassing, or otherwise objectionable, whether or not constitutionally protected... Scope: Defamation, most state civil and criminal claims, federal civil

(but not criminal) claims. Preempts inconsistent state laws. Excludes: federal criminal claims, claims under the ECPA or “any

similar state law” and “any law pertaining to intellectual property.”

22

Other Claims vs. Service Providers -47 U.S.C. § 230

Perfect 10, Inc. v. Ccbill, 481 F.3d 751 (9th Cir. 2007) (right of publicity claim) But see Doe v. Friendfinder Network, Inc., 540 F. Supp. 2d 288

(D.N.H. 2008) Atlantic Recording Corp. v. Project Playlist, Inc., 2009 WL

766224 (S.D.N.Y. Mar. 25, 20009) Doe v. MySpace, 528 F.3d 413 (5th Cir. 2008)

Compare Doe v. SexSearch.com, 551 F.3d 412 (6th Cir. 2008) (declining to read section 230 as preempting all claims, but affirming judgment for the defendant based on the TOU)

Chicago Lawyer’s Comm. for Civil Rights v. Craigslist, Inc., 519 F.3d 666 (7th Cir. 2008) (no liability for discriminatory user-posted housing notices)

Fair Housing Council v. Roommates.com, LLC, 521 F.3d 1157 (9th Cir. 2008) Multiple choice questionnaire written by Roommates.com vs.

white space

23

How Do I Protect My Brand While Taking Advantage of These Sites?

Register trademarks with each siteConsider registering every possible

domain name that could be associated with brand (within reason)

24

How Do I Protect My Brand While Taking Advantage of These Sites?

Monitor sites to determine if trademark is being used without permission Internal monitoring Third party vendors Law firm monitoring

Understand basic terms of service of each site

Report alleged infringement to social networking site

25

How Do I Protect My Brand While Taking Advantage of These Sites?

Develop P&P for use of sites by employees What to post (and NOT to post) on company’s

behalf Guidelines for personal use

Develop and implement anti-counterfeiting programs

Insurance considerations

26

Reference Materials

Terms of Use http://twitter.com/tos http://www.facebook.com/terms.php?ref=pf http://www.myspace.com/index.cfm?fuseaction=misc.t

erms “Protecting Your Rights in 140 Characters or Less:

Trademark Protection on Twitter” http://www.lw.com/upload/pubContent/_pdf/pub2684_1.pdf

“Creative Business Uses of Twitter” http://www.businessweek.com/the_thread/blogspotting/archives/2008/04/creative_busine.html?campaign_id=rss_blog_blogspotting

http://twittercounter.com/

FEDERAL PREEMPTION OF INTERNET-BASED

DEFAMATION, RIGHT OF PUBLICITY AND

OTHER STATE LAW IP CLAIMS:

Why the Ninth Circuit Rule is Wrong

Excerpted from Chapter 37 (Defamation and Torts) of E-Commerce and Internet Law:

A Legal Treatise With Forms, Second Edition, a 4-volume legal treatise by Ian C. Ballon

(Thomson/West Publishing 2009)

Ian C. Ballon

Greenberg Traurig, LLP

2450 Colorado Ave., Suite 400E

Santa Monica, CA 90404

Direct Dial: (310) 586-6575

Direct Fax: (310) 586-0575

1900 University Avenue, 5th Fl.

East Palo Alto, CA 94303

Direct Dial: (650) 289-7881

Direct Fax: (650) 462-7881

ballon@gtlaw.com

<www.ballononecommerce.com>

This paper has been excerpted from E-Commerce and Internet Law: Treatise with Forms, 2d Edition (West 2009), a multi-volume legal

treatise by Ian C. Ballon, published by West LegalWorks Publishing, 395 Hudson Street, New York, NY 10014, (212) 337-8443,

www.ballononecommerce.com.

“Tiffany v. eBay Reiterates Principles of

Internet Liability for Third Party Acts of

Trademark Infringement”

by Ian C. Ballon

Ian C. Ballon

Greenberg Traurig, LLP

1900 University Avenue, 5th Fl.

East Palo Alto, CA 94303

Direct Dial: (650) 289-7881

Direct Fax: (650) 462-7881

2450 Colorado Ave., Suite 400E

Santa Monica, CA 90404

Direct Dial: (310) 586-6575

Direct Fax: (310) 586-0575

ballon@gtlaw.com

<www.ballononecommerce.com>

Tiffany v. eBay Reiterates Principles of Internet Liability for Third Party Act of Trademark Infringement By Ian C. Ballon1 The recent decision in Tiffany (NJ) Inc. v. eBay, Inc., No. 04 4607 (S.D.N.Y. July 14, 2008), serves as a reminder -- both to intellectual property owners and service providers -- that it is often difficult to hold an Internet site or service liable for the trademark violations of its users absent specific knowledge or encouragement on the part of the site or service. In the Tiffany case, Tiffany had sued eBay arguing that it should be held secondarily liable for allegedly infringing products listed and sold through eBay by eBay users. Liability for contributory trademark infringement may be imposed where a manufacturer or distributor (1) intentionally induces another to infringe a trademark or (2) continues to supply a product to someone who it knows or has reason to know is engaging in trademark infringement. Inwood Laboratories, Inc. v. Ives Laboratories, Inc., 546 U.S. 844, 854 (1982). eBay, with one of the most extensive programs online for combating user infringement, was not accused of inducing trademark infringement. Rather, Tiffany alleged that eBay knew or had reason to know that its site was used for infringement. The test for contributory infringement, as stated by the U.S. Supreme Court, focuses on manufacturers, distributors and products. There has therefore been an open question about whether or at least to what extent the contributory infringement doctrine even applied to services. See, e.g., Rock Café Licensing Corp. v. Concession Services, Inc., 955 F.2d 1143, 1148 (7th Cir. 1992). In Tiffany v. eBay, Judge Richard Sullivan of the Southern District of New York followed the Ninth Circuit’s ruling in Lockheed Martin Corp. v. NSI, 194 F.3d 980 (9th Cir. 1999) in holding that where liability is premised on the conduct of a user of a venue (as opposed to a manufacturer or distributor of a product), an initial threshold showing -- direct control and monitoring over the means of infringement -- must be made.

eBay is an electronic marketplace, not a retailer, and never takes physical possession of goods sold through its website. Judge Sullivan nonetheless ruled that eBay exerted sufficient control to proceed to evaluate liability under the Inwood test for contributory infringement. He held, however, that eBay was not liable for contributory infringement because it did not have sufficient knowledge of specific acts of infringement on its site and, when it did, it acted appropriately to discontinue the listing.

1 Ian C. Ballon is a shareholder in the Intellectual Property Litigation and Media and Entertainment practice groups of Greenberg Traurig LLP and splits his time between the firm’s Silicon Valley and Santa Monica offices. He is also the author of the four-volume legal treatise, E-Commerce & Internet Law: Legal Treatise with Forms (West Publishing). Mr. Ballon’s clients include entertainment, technology, media and Internet companies, but the views expressed in this article are solely his own. He may be reached at Ballon@GTLaw.com.

In so ruling, the court rejected Tiffany’s argument that eBay could be held liable if it could reasonably anticipate that infringing material would be posted on the site. Knowledge or reason to know must be shown, not reasonable anticipation.

The court also rejected the notion that liability could be premised on generalized

knowledge that a defendant’s site or service could used for infringement. Such a standard, Judge Sullivan ruled, would effectively stifle lawful sales of legitimate new and used Tiffany products on eBay. Indeed, he reiterated that merely sending a demand letter does not provide a service provider with sufficient knowledge to sustain a trademark owner’s burden of proof because merely alleging infringement is not the same thing as proving it.

The court’s decision serves as a reminder to both trademark owners and service providers

that, as the U.S. Supreme Court noted, secondary trademark infringement generally is more difficult to prove than secondary copyright liability. See Sony Corp. v. Universal City Studios, Inc., 464 U.S. 417, 439 n.19 (1984). Whereas notice arguably may create at least a factual question on the issue of whether a service provider could be held liable for contributory copyright infringement if the provider subsequently fails to take action (see, e.g., Religious Technology Center v. Netcom On-Line Communication Services, Inc., 907 F. Supp. 1360, 1374 (N.D. Cal. 1995)), the same generally is not true under the Lanham Act. The nature and scope of trademark rights expand and contract with use (and third party uses) over the life of a mark and therefore are often difficult to evaluate. For this reason, knowledge of trademark infringement may not be imputed based solely on a mark owner’s assertion of this fact in a cease and desist letter.

At the same time, there is no Digital Millennium Trademark Act like the DMCA (17

U.S.C. § 512) that creates both a mechanism for rights owners to quickly have allegedly infringing material removed and a safe harbor for service providers to avoid liability for user misconduct. While service providers potentially face liability risks under the Lanham Act that copyright owners may not because of the DMCA, Tiffany v. eBay underscores that the risk is more limited.

In Tiffany v. eBay, eBay was found not liable in no small part because of its extensive

anti-piracy efforts. eBay operates a Trust and Safety Department, has a fraud engine that it uses to detect listings for counterfeit or pirated products and maintains a Verified Rights Owner (VeRO) Program, which is a “notice and takedown” system that rights owners, including Tiffany, use to report and have unauthorized items removed. The evidence at trial also established that eBay investigated and responded to all notices sent to it by Tiffany.

Unlike eBay, an Internet site or service that does not actively deter infringement might

find itself in a different situation.

The Tiffany v. eBay ruling underscores the importance for service providers to maintain vigorous anti-piracy efforts. It also points out that (as under copyright law) the burden of policing for third party acts of infringement is squarely on the IP rights owner. Pirate sites or services that trade in counterfeit goods can and regularly are held liable for their own misdeeds, as well as those of their users. However, absent evidence of inducement or specific knowledge

and a failure to take action, trademark owners have a difficult standard to meet under Inwood in seeking to hold legitimate Internet sites or services that do not condone piracy liable for the unauthorized acts of their users.