CheerUniformsDecisionImageOn March 22, 2017, the Supreme Court held in Star Athletica, LLC v. Varsity Brands that design elements of cheerleading uniforms may be protected under the Copyright Act. The 6-2 decision, written by Justice Thomas, clarified the scope of protection afforded to clothing designs and, more broadly, designs on useful articles.

Varsity Brands, Inc.—the country’s largest cheerleading supplier—owns more than 200 copyright registrations for two-dimensional designs consisting of combinations of chevrons, stripes, and other colorful shapes for its cheerleading uniforms. At issue in this case were the five pictured designs.

Varsity Brands sued Star Athletica, LLC, an upstart competitor, for copyright infringement. The District Court for the Western District of Tennessee granted Star Athletica’s motion for summary judgment, holding that the designs could not be conceptually or physically separated from the uniforms, and they were therefore ineligible for copyright protection. The Copyright Act makes “pictorial, graphic, or sculptural features” of the “design of a useful article” eligible for copyright protection as artistic works only if those features “can be identified separately from, and are capable of existing independently of, the utilitarian aspects of the article.” The Sixth Circuit reversed, concluding that the graphics were “separately identifiable” and “capable of existing independently” of the uniforms.

In affirming, the Supreme Court laid out a two-part test for when a feature incorporated into the design of a useful article is eligible for copyright protection: When the feature (1) can be perceived as a two- or three-dimensional work of art separate from the useful article; and (2) would qualify as a protectable pictorial, graphic, or sculptural work—either on its own or fixed in some other tangible medium of expression—if it were imagined separately from the useful article into which it is incorporated. “To be clear, the only feature of the cheerleading uniform eligible for a copyright in this case is the two-dimensional work of art,” the Court explained. “Respondents have no right to prohibit any person from manufacturing a cheerleading uniform of identical shape, cut, and dimensions to the ones on which the decorations in this case appear.” Continue Reading Supreme Court Rules Cheerleading Uniform Designs Are Copyrightable

iStock_70946345_smallSince our previous article on the emerging issue of trademark rights in hashtags, the use of hashtags in social media marketing has continued to grow. Described as the “ignition keys to a social media keyword search,” hashtags can be powerful tools for creating communities around a brand. Indeed, recent scholarship suggests that modern brand narratives are written in collaboration with consumer communities rather than by brand owners acting alone.

A catchy hashtag creates its own social media channel and brand owners naturally want to prevent competitors from hijacking the content stream tied to their cleverly crafted messages.  To safeguard the investment in this narrative, companies are increasingly seeking trademark protection for their hashtags. Applications for hashtag trademarks continue to soar, with over 1,042 hashtag trademark applications in 2015 in the United States alone. However, despite the United States Patent and Trademark Office’s (or USPTO’s) guidance regarding hashtag trademarks in its Trademark Manual of Examining Procedure (or TMEP), hashtags continue to pose challenges for both USPTO examiners and the courts.

At the USPTO, examination and registration of hashtag marks remain somewhat inconsistent. As we noted in our previous article, the USPTO has addressed the issue of hashtags’ ability to function as trademarks in the “Hashtag Marks” section of the Trademark Manual of Examination Procedure. In essence, the TMEP states that the hashtag symbol should be ignored by the examiner and the hashtag mark should be examined in the same manner that any other tag line or phrase would be. In other words, according to the USPTO, a hashtag is no more—but also no less—capable of functioning as a trademark than the non-hashtag form of the relevant tag line or phrase would be. But does this approach ignore some unique features of hashtag marks?

First, while descriptiveness is an issue for both hashtag and non-hashtag marks, the fact that hashtag marks also function as online search terms would seem to increase the need for a hashtag to have a close and obvious connection to a particular brand if it is to be recognized as a trademark—i.e., an identifier of the source of goods and services—and not merely a search term. For example, the word “Tasty” may be merely descriptive when used on a package of bread, but #Tasty is arguably even less distinctive when used only in a social media campaign, considering that the hashtag does not actually appear on the product and, considered as a search term, could be relevant to any number of topics.

The TMEP notes this problem and instructs that #Skater for skateboarding equipment would not be registrable as merely descriptive. However, in practice, the USPTO has not always been entirely consistent in assessing the descriptiveness of hashtag trademarks. For example, the USPTO has allowed #LetsBowl for bowling balls and #Smart for clothing without raising a descriptiveness objection. The USPTO also allowed Abercrombie & Fitch to register #SoCalStylist for retail store services featuring clothing and accessories, and a non-profit to register #KickHunger for promoting public awareness of hunger and hunger relief. But the USPTO found #WeatherWednesday for an online newsletter about the weather and #MusicVideoMonday for advertising services and mobile marketing to be merely descriptive, allowing only registration on the supplemental register.

Second, the fact that a hashtag often appears only on social media rather than on the goods themselves or in advertising raises questions regarding what constitutes an acceptable
specimen
for a hashtag mark. The USPTO has not formulated a clear policy on this issue. The TMEP notes that if #SewFun was the subject of a trademark application for “instruction in the field of sewing” with a specimen consisting of a screenshot of a social networking site used to organize user comments about sewing classes that the applicant offers, the mark would be refused registration for failure to function as a service mark. Accordingly, the USPTO rejected the initial specimen for #LeadershipFlow in connection with business education services that consisted of the applicant’s website with posts about business topics. However, the USPTO allowed Procter & Gamble to register #LikeAGirl for “providing information in the field of female empowerment, anti-gender discrimination via social media” with a screenshot of its Twitter page as a specimen.

Only a handful of court decisions have dealt with the subject of trademark rights in hashtags to date, with similarly inconsistent outcomes. As we previously wrote, a district court in Mississippi held that use of the tags #FratCollection and #FraternityCollection by a competitor of the clothing maker Fraternity Collection was sufficient to state a claim for false advertising under the Lanham Act and for trademark infringement under state law. However, in a recent California case, Eksouzian v. Albanese, the court concluded that a competitor’s use of a hashtag did not violate a settlement agreement on trademark usage between the parties because the hashtag was “merely a functional tool.”

The parties in Eksouzian had jointly developed a compact vaporizer pen, but later separated and entered into a settlement agreement pursuant to which the plaintiffs were permitted to use the terms “Cloud” or “Cloud Vapes” as trademarks, but not in such close association with the words “pen” or “penz”—common descriptors for compact vaporizers—as to form a unitary trademark. Plaintiffs then used the hashtags #cloudpen and #cloudpenz in connection with promotional contests on social media. The court found that plaintiffs did not breach the settlement agreement because “hashtags are merely descriptive devices, not trademarks, unitary or otherwise, in and of themselves” and use of the hashtag “is merely a functional tool to direct the location of Plaintiffs’ promotion so that it is viewed by a group of consumers, not an actual trademark.” This conclusion seems to be at odds with the USPTO’s willingness to register hashtags as trademarks.

In another recent case, Public Impact, LLC v. Boston Consulting Group, Inc., a Massachusetts court came to the opposite conclusion. In that case, Public Impact, LLC, an education policy and management consulting firm that owns a federal registration for the mark PUBLIC IMPACT, sought a preliminary injunction to prevent the defendant, Boston Consulting Group (or BCG), from using the hashtag #PublicImpact and the username @4PublicImpact on social media. After determining that BCG had not submitted sufficient evidence to show that “public impact” is generic for consulting services in light of the fact that Public Impact’s federal registration had attained incontestable status, the court concluded that BCG’s use of the username and hashtag was likely to constitute trademark infringement, particularly given the similarity of the services provided by the two organizations. Accordingly, the court enjoined BCG from using the phrase “public impact” with two or fewer letters, numbers, or characters appended in any form on social media or in other commercial activities.

In sum, the application of trademark law to hashtags and the rapidly evolving social media landscape is still in its very early stages. With regard to federal registration, one scholar has argued that the USPTO should treat hashtag marks as “primarily merely a hashtag” until the applicant can establish that the mark actually functions as a source indicator, an approach that could avoid some of the inconsistencies seen in the registration process today. The bigger questions regarding the scope of protection afforded to hashtag marks and the analysis of trademark infringement involving use of hashtag marks on social media, however, have yet to be resolved.

*          *        *

Check out the first article in this series: #Trademarks?: Hashtags as Trademarks

For other Socially Aware posts on intellectual property issues, please see the following: The Kirtsaeng Opinion: Supreme Court Guidance on Attorneys’ Fees Awards in Copyright Cases; Do Not Go Gentle Into That Jurisdiction: No “Situs of Injury” Merely Because Copyrighted Material Is Accessible; and Twenty Years Down the Road: A Q&A With Paul Goldstein, Author of Copyright’s Highway.

150728SociallyAware_Page_01The latest issue of our Socially Aware newsletter is now available here.

In this issue of Socially Aware, our Burton Award-winning guide to the law and business of social media, we present a “grand unifying theory” of today’s leading technologies and the legal challenges these technologies raise; we discuss whether hashtags can be protected under trademark law; we explore the status of social media accounts in bankruptcy; we examine the growing tensions between content owners and users of livestreaming apps like Meerkat and Periscope; we highlight a recent discovery dispute involving a deactivated Facebook account; we discuss a bill before Congress that would protect consumers’ rights to post negative reviews on websites like Yelp; and we take a look at the Federal Trade Commission’s crackdown on in-store tracking activities.

All this—plus an infographic exploring the popularity of livestreaming sites Meerkat and Periscope.

Read our newsletter.

hashtag_iStock_000047220610_Illustration_650pxHashtags have become ubiquitous in social media, but their status as intellectual property—particularly as trademarks—is still developing. First adopted by Twitter users to link user posts, hashtags are character strings preceded by the “#” symbol that generate a link to all other posts containing the same tag. Today, in addition to providing the search-related functionality for which they were first developed, hashtags provide businesses new ways to engage with consumers. Hashtag marketing campaigns by businesses generate brand awareness by encouraging social media users to post with the campaign tag and, in return, offer users discounts, prizes or even a chance to become a model.

But can a hashtag be registered as a trademark? The functional nature of hashtags led to initial uncertainty on this question, which the U.S. Patent and Trademark Office settled in 2013 when it added a new section to the Trademark Manual of Examination Procedure on registration of hashtag marks. The USPTO defines a hashtag as “a form of metadata comprised of a word or phrase prefixed with the symbol ‘#’” and states that a hashtag mark may be registerable, but only if it functions as an identifier of the source of the applicant’s goods or services. For example, #ingenuity would be registerable for business consulting services as a distinctive term, while #skater for skateboard equipment would be merely generic and non-registerable. In addition, to obtain a registration, the applicant must provide evidence of the use of the mark in connection with the relevant goods or services, which means that, like any other trademark, a hashtag mark must actually be used in commerce to be registrable.

Unlike traditional tag lines, which are meant to be used primarily by the mark owner, hashtags are typically intended to be disseminated by social media users. For example, the makers of Mucinex have registered #blamemucus, which allows potential consumers to commiserate about their colds through social media, as well as spread the word about Mucinex and participate in drawings for prizes. The #blamemucus registration covers both the pharmaceutical products themselves (with a store display bearing the mark as a specimen of use) and services consisting of providing information in the field of respiratory and pulmonary conditions via the internet (with the company website as a specimen). By covering both the core goods and online services, the registration provides broad protection for the hashtag mark against use by competitors. Companies may also attempt to register a phrase that has already become an internet meme. For instance, an application for #throwbackthursday has been filed by producers of an entertainment and comedy series, while #fixitjesus has been claimed by a maker of T-shirts.

As one might expect, the widespread use of hashtags has resulted in trademark disputes from time to time. In 2010, for example, a Wyoming-based chain of Mexican restaurants called Taco John’s, which owns a federal registration for the mark “Taco Tuesday,” sent a cease-and-desist letter to an Oklahoma restaurant called Iguana Grill seeking to stop Iguana Grill’s use of the phrase “Taco Tuesday” and the hashtag #tacotuesday for its own taco promotion. Iguana Grill did agree to stop using the name for its taco night; as of this writing, the restaurant’s Facebook page exhorts customers to “Keep a look out for our taco specials . . . for Iguana Tuesday!” But, as is often the case with arguably heavy-handed trademark enforcement efforts, Taco John’s cease-and-desist letter also resulted in considerable public criticism of Taco John and outspoken support for Iguana Grill.

In March 2015, clothing maker Fraternity Collection brought trademark infringement claims in federal district court in Mississippi against a former designer based on use of the tags #fratcollection and #fraternitycollection on social media. The court accepted at the pleading stage “the notion that hashtagging a competitor’s name or product in social media posts could, in certain circumstances, deceive consumers.” Accordingly, the court held that Fraternity Collection’s complaint stated a claim for false advertising under the Lanham Act and for trademark infringement under state law, and denied the designer’s motion to dismiss those claims. This was, as far as we are aware, the first time that a court has found that use of a competitor’s mark in a hashtag, rather than on the product itself, could result in consumer deception.

The Fraternity Collection case involved a clearly competitive use of the hashtags. What remains unclear, however, is how trademark law will treat hashtags used for non-competitive goods and services. The traditional test for infringement is the likelihood of consumer confusion. This inquiry weighs a number of factors, including the similarity of the respective marks, similarity of the respective goods or services and the advertising channels used by the parties. Thus, courts have generally found consumer confusion to be unlikely when similar or identical marks are used for unrelated goods or services that tend to be advertised in different channels. The use of identical hashtags, however, creates a single feed of all posts under same tag, regardless of how different the advertised goods or services may be. Unlike in the physical world, where businesses can stake out non-overlapping niches for unrelated goods or services, the tag itself acts as an advertising channel on social media platforms. It remains to be seen how this functional aspect of hashtags will be weighed by the courts in the consumer confusion analysis.

As competition for attention among social media users increases, trending tags may become an increasingly prized commodity. On the other hand, given the ephemeral nature of some hashtags and the fleeting popularity of social media fads, companies should consider the long-term viability of a particular hashtag before expending time and resources to protect it. In any event, before adopting hashtags for social media campaigns, it is imperative to research potential conflicts, which may include trademark clearance searches to identify conflicting uses. And if a hashtag has already become an effective marketing tool, it may be time to consider registering it as a trademark.

This is the famous Monkey Selfie.

When we last examined the intellectual property issues raised by a self-portrait taken by a talented female Indonesian crested black macaque—popularly known as the “Monkey Selfie”—we concluded that there was unlikely to be any copyright protection in the work, under either U.S. law or U.K. law.

Following that analysis, the U.S. Copyright Office further clarified its views on the subject.  In its public draft of the third edition of the Compendium of U.S. Copyright Office Practices, the Copyright Office specified in Section 306 (“The Human Authorship Requirement”) that “[t]he Office will not register works produced by nature, animals, or plants. . . .  Examples:  A photograph taken by a monkey.”

 

Now there is yet another wrinkle in the saga of what may be the world’s most photogenic monkey.

A company identified as Saban Capital Group Inc., based out of the British Virgin Islands, has filed an application with the U.S. Patent and Trademark Office to register a trademark in the image of a monkey for use on various types of apparel—including wedding gowns (one can only imagine the market for such an item).  The company claims to have been using this image in commerce since August 16, 2010—which we understand is prior to the date that the Monkey Selfie was taken.  Nevertheless, the image in question bears a striking resemblance to a certain photograph of a fetching Indonesian primate.  But given that no one owns a copyright in the Monkey Selfie, it is unclear whether the Trademark Office or anyone else will seek to prevent a drawing based on the image—if that is what this is—from being registered as a trademark for use on certain apparel.

This is the image from the trademark application.

We note that the application is in its very early stages, and has not yet been assigned to an examining attorney.

Having made an impact on copyright law, is the monkey now turning her sights to trademark law? What next? The right of publicity? A patent application? Will any area of intellectual property law be left untouched by this simian shutterbug? Stay tuned.

The ability to associate goods and services with a specific domain name can make or break a business, so much so that companies are still willing to fork over millions to purchase domain names.  And although you may consider yourself lucky to have registered a catchy domain name that drives plenty of traffic to your website, query whether the domain name is actually your property; not only do companies that provide domain name registration services frequently take the position that domain names are not property, but at least one recent case law suggests this as well.

The concept that domain names can be “owned” as intangible personal property seems reasonable on its face, particularly given the close relationship between domain names and trademarks, the latter of which historically have been considered property.  Domain names frequently contain a registrant’s trade name or trademark associated with the registrant’s goods or services.  Moreover, the Anticybersquatting Consumer Protection Act of 1999 (15 U.S. Code § 1125) permits a trademark owner to pursue an in rem action against a domain name that violates the mark owner’s rights, and the availability of an in rem action implies that the Act treats domain names as property.

On the other hand, domain names and trademarks are distinguishable.  For example, certain prerequisites for federal trademark registration, such as proof of the mark being used in interstate commerce to identify a specific type of good or service, do not apply to domain name registrations (which instead are registrable on a first-come, first-served basis).  And although similar marks used by different companies can potentially co-exist depending on territorial and other factors, each registered domain name is unique, at least with respect to the applicable top-level domain.  (Given that uniqueness, and the ability of domain names to “point” Internet users to information sources, domain names have been likened to toll-free “vanity” telephone numbers; like domain names, vanity telephone numbers that include a company’s name or mark are, in a sense, tools that can help drive traffic to the company’s offerings.)

On November 7, 2013, in Alexandria Surveys, LLC v. Alexandria Consulting Group, the U.S. District Court for the Eastern District of Virginia held that under Virginia law, domain names, like telephone numbers, are not property.  In Alexandria, two competitors, Alexandria Surveys LLC (“ASL”) and Alexandria Consulting Group (“ACG”), each sought the rights to the domain name ALEXANDRIASURVEY.COM, which previously had been registered by Alexandria Surveys International (“ASI”), a debtor in bankruptcy.  ASL had purchased from Cox Communications ASI’s former telephone number and domain name, which had not been scheduled by the trustee in ASI’s bankruptcy proceeding.  ASI’s estate was later reopened, and among other assets, the trustee auctioned off that same telephone number and domain name to ACG.  The bankruptcy court ordered ASL to hand over the disputed assets to ACG, and ASL appealed.

The District Court, noting the absence of any on-point Fourth Circuit precedent, relied on the 2000 decision in Network Solutions Inc. v. Umbro International, Inc. et al., in which the Virginia Supreme Court held that domain names are contractual rights rather than property rights subject to garnishment, that is, that they are merely “the product of a contract for services between the registrar and registrant,” because they cannot exist without the provider performing services under the applicable domain name registration services agreement.  Although the court in Alexandria acknowledged a split in authority concerning the proprietary nature of telephone numbers, the court ultimately agreed with the Virginia Supreme Court’s conclusion that “Virginia does not recognize an ownership interest in . . . web addresses[,]” and held that ASI’s domain names were not transferred as part of the estate.  Although the court in Alexandria acknowledged that a domain name can be valuable, the court reasoned that such value is subjective and therefore in itself insufficient to support an argument that domain names constitute property.

The view that domain names are not personal property can be viewed as contrary to the Ninth Circuit’s well-known 2003 ruling in Gary Kremen v. Stephen Michael Cohen, et al., concerning the wrongful transfer of the highly lucrative domain name SEX.COM.  In Kremen, Gary Kremen, the original registrant of SEX.COM, sought to recover against Network Solutions (“NSI”) under theories of breach of contract and conversion after NSI transferred the domain name to Stephen Cohen without his authorization.  Although Kremen’s breach of contract claim failed for want of consideration—Kremen had registered SEX.COM in the mid-1990s, when NSI was issuing domain name registrations to companies and individuals free of charge—the Ninth Circuit ruled that a registrant does have a property right in a registered domain name and that the unauthorized transfer of that domain name serves as a basis for a claim of conversion.  In support of this conclusion, the Ninth Circuit pointed out that domain names represent an interest that is well-defined; that domain names are subject to exclusive possession or control; and that registrants can have a legitimate claim to exclusivity over domain names.

Meanwhile, some domain name registration service providers go to great lengths to inform their customers that domain names are not property.  Namecheap’s registration agreement states: “You further agree that domain name registration is a service, that domain name registrations do not exist independently from services provided pursuant to this or a similar registration agreement with a registrar, and that domain name registration services do not create a property interest.”  And GoDaddy’s registration agreement requires customers to “acknowledge and agree that by registering a domain name, you are not acquiring any property rights in that domain name.”

Also keep in mind that treating domain names as property is not without potential problems.  For example, as the Virginia Supreme Court pointed out in Network Solutions, treating domain names as property and thereby subjecting them to garnishment could open the door to garnishment of other business indicia, such as corporate names, “by serving a garnishment summons on the State Corporation Commission since the Commission registers corporate names and, in doing so, does not allow the use of indistinguishable corporate names.”  It is unclear how problems like these might be resolved in the future.

For now, the answer to whether domain names constitute personal property is a tough question and may depend on the jurisdiction where a claim is ultimately raised.  And, from a practical standpoint, care should be taken in how domain names are treated in commercial transactions, given that they are frequently among a business’s most important features. 

Readers of our blog may remember Leonard Barshack as the co-founder of Bigfoot, a popular Internet mail forwarding service that launched in 1995. Barshack, a resident of Sun Valley, Idaho, recently became well-known once again for his role as plaintiff in Barshack v. Twitter, a suit filed in Idaho’s Blaine County District Court on May 6, 2013 against Twitter and Sun Valley Company, the owner of Sun Valley Resort.

According to the complaint, Barshack began using the Twitter handle “@SunValley” for personal use back in April 2008. Although not the most avid tweeter, Barshack used his handle to tweet on a variety of topics, including skiing—even skiing at co-defendant Sun Valley Company’s resort. According to some accounts, Barshack’s long-term plan for his Twitter account was to use it to promote local businesses in Sun Valley, Idaho. But in October 2012, Twitter notified Barshack that it had “received a valid report and determined that [Barshack’s] account, @SunValley, is engaged in non-parody impersonation,” and re-assigned his account to the potentially less aesthetically pleasing @sunvalley_.

Over the next few months, Barshack contacted Twitter multiple times by mail, the contents of which are attached as an exhibit to Barshack’s complaint. According to Barshack, the only response he received from Twitter was a boilerplate message that included a copy of Sun Valley Resort’s original report of impersonation, which is also included in the complaint’s exhibits. Ultimately, Barshack and his attorney and wife Erin Smith filed suit in May 2013, demanding that Twitter return the @SunValley handle to Barshack.

Barshack’s complaint seeks an injunction prohibiting Twitter from permitting Sun Valley Company to use the @SunValley handle and demands that Twitter return the handle to Barshack. In addition, the complaint alleges breach of contract and breach of good faith and fair dealing by Twitter. According to Barshack’s May 30, 2013 tweet from his new Twitter account bearing the handle @IWasSunValley, Barshack “granted extensions to both SVC and Twitter until mid-june [sic] for them to reply.” The Twitter tagline for Barshack’s @IWasSunValley account reads: “Fighting Evil and Arrogance for as long as I can remember.

The exhibits attached to Barshack’s complaint show that Twitter’s original decision to re-assign the @SunValley handle to Sun Valley Company was based on Twitter’s trademark and impersonation policies. Twitter’s trademark policy prohibits the use of trademarked material that is intended to mislead or confuse, or has the effect of misleading or confusing others, but, significantly, the policy permits the use of “another’s trademark in a way that has nothing to do with the product or service for which the trademark was granted.” In parallel, Twitter’s impersonation policy prohibits “accounts portraying another person in a confusing or deceptive manner” but permits accounts in which “the user shares [the name of the person being impersonated] but has no other commonalities” or for which “the profile clearly states it is not affiliated with or connected to any similarly-named individuals.”

In Sun Valley Resort’s original October 2012 report to Twitter concerning the @SunValley handle, Sun Valley Resort alleged that Barshack’s @SunValley account was “using artwork from our trademarked Logo along with wrod [sic] mark of Sun Valley,” and that Sun Valley Resort “would like to use this username on Twitter.” One of the pieces of artwork at issue was an illustration of a “sun representing a human face or an animal”; the other was “a sun positioned above and to the right side of the words ‘Sun Valley’.” Barshack’s complaint argues that many local businesses in Sun Valley, Idaho use a similar illustration to promote their companies, and that the trademark registration for the only logo he used—the illustration of the “sun representing a human face or an animal”—had expired due to non-renewal. The complaint further argues that Barshack’s Twitter account had neither the intention nor the effect of deceiving, misleading or confusing others into thinking that the account was operated by Sun Valley Resort, which could be a critical point if Sun Valley Company were to respond with an allegation of infringement of either federal or common law trademark rights.

It is unclear how Barshack intends to use the @SunValley handle if it is ultimately re-assigned to him. Barshack reportedly has stated that if he does reacquire the handle, it would not be for sale (and note that Twitter’s username squatting policy already prohibits attempts “to sell, buy, or solicit other forms of payment in exchange for usernames”). Regardless of the outcome, Barshack v. Twitter may be one of the first cases of its kind in which a user has formally filed suit against Twitter for re-assigning the user’s handle to someone else, and the case underscores the fact that in the world of social media, even if you grab your username first, you might not always be able to keep it.

Last year, the Internet Corporation for Assigned Names and Numbers (ICANN) received over 1,900 applications for new generic top-level domains (gTLDs), including multiple applications for popular domains like .app, .inc, .art, .shop and .music. More than seven hundred applications have now passed an initial evaluation. If no further issues arise for those applications, ICANN anticipates that some of the new gTLDs could go live in the next few months.

Although the new gTLD program will provide businesses with more opportunities to register for industry-specific Internet addresses (such as domain names ending in .search, .map, .book and .app), the gTLD expansion will also create significant opportunities for bad-faith registration of second-level domain names (e.g., [TRADEMARK].[new gTLD]). Anticipating this problem, ICANN designed “rights protection mechanisms,” discussed in further detail below, to preempt or curtail some bad-faith behavior. The immense number of new gTLDs that are expected to go live, however, creates practical complications for trademark owners—particularly companies that have a large number of trademarks. In considering whether to take advantage of the rights protection mechanisms, such companies may want to focus their efforts on protecting a smaller number of key brands.

DETERRING CYBERSQUATTING

ICANN has established a Trademark Clearinghouse, which plays a central role in ICANN’s rights protection mechanisms. Anyone who has protectable rights in a trademark can seek to record that trademark in the Clearinghouse for a fee of approximately $145 per trademark record per year. The Clearinghouse will verify each submission and will function as a repository of verified records. The new gTLD registries will use the verified records in the Clearinghouse in connection with two rights protection mechanisms.

First, each new gTLD registry must provide an initial sunrise period for a minimum of 30 days for anyone who has a verified trademark record in the Clearinghouse and who can demonstrate use of that trademark. During this period, qualifying trademark owners may preregister for second-level domain names that match their verified trademarks (e.g., [VERIFIEDTRADEMARK].[new gTLD]). Verification in the Clearinghouse does not guarantee allocation of a second-level domain name, however, because there may be multiple qualified trademark owners. Disputes regarding sunrise registrations will be resolved according to each registry’s dispute resolution process.

Second, for a minimum of 90 days immediately after a registry opens a new gTLD to the public for general registration, the registry must provide a trademark claims notice to anyone seeking to register a second-level domain name that matches a Clearinghouse record. The notice will list the owner, trademark, jurisdiction(s) and goods and/or services. The domain name applicant may proceed with the second-level domain name registration, but only after acknowledging receipt of the notice. If the domain name applicant proceeds with the registration, the trademark owner will be notified of the registration. The trademark owner will not be able to block the registration, but will be able to file a Uniform Rapid Suspension System (URS) or Uniform Domain Name Dispute Resolution Policy (UDRP) action to suspend or obtain the domain name. In such proceedings, the trademark claims notice could make it difficult for a cybersquatter to plead innocent.

DECISION TIME FOR TRADEMARK OWNERS

Trademark owners who want to assure maximum protection for their marks need to act now. Not only is the verification pace in the Clearinghouse expected to slow down as the volume of submissions increases, it is anticipated that some of the new gTLDs could go live as early as late summer. Trademark owners whose records have not been verified by the Clearinghouse when the first new gTLDs are launched will not be able to take advantage of the corresponding sunrise periods and will not receive notices if someone applies to register a second-level domain name that matches their trademark.

In the latest issue of Socially Aware, our Burton Award-winning guide to the law and business of social media, we look at recent First Amendment, intellectual property, labor and privacy law developments affecting corporate users of social media and the Internet. We also recap major events from 2012 that have had a substantial impact on social media law, and we take a look at some of the big numbers racked up by social media companies over the past year.

To read the latest issue of our newsletter, click here.

For an archive of previous issues of Socially Aware, click here.

BitTorrent, the peer-to-peer (P2P) file-sharing system that enables the quick downloading of large files, has sparked another novel controversy stemming from copyright-infringement claims brought against its users. Users take advantage of the BitTorrent sharing system to anonymously access popular media such as books and movies. That anonymity is unlikely to last long for users who are alleged to have downloaded copyrighted material. Last month, Judge Sweet, a federal judge in the Southern District of New York (SDNY), held that an anonymous P2P user has no First Amendment right to quash a subpoena seeking her identity where the plaintiff had no other means to effectively identify the defendant.

In John Wiley & Sons Inc. v. Does Nos. 1-35, the plaintiff (Wiley), a publisher of books and journal articles, alleged that unidentified “John Does” used BitTorrent to illegally copy and distribute Wiley’s copyrighted works and infringe on Wiley’s trademarks. Wiley sued 35 defendants known only by their “John Doe Numbers” and Internet Protocol (IP) addresses. Seeking to identify the Does, Wiley moved for court-issued subpoenas to be served on various Internet service providers (ISPs), ordering them to supply identifying information corresponding to the Does’ IP addresses. In an attempt to maintain her anonymity and avoid liability, one of the 35 Does, then known only as John Doe No. 25 (“Doe 25”) or IP Address 74.68.143.193, moved to quash a subpoena served on her ISP, Time Warner Cable.

Wiley reflects a new wave of litigation in which copyright holders have shifted from suing host sites to focusing on individual users of P2P networks. The mere fact that copyrighted material is downloaded from a particular IP address may be insufficient to prove that the P2P network user is the infringer. An IP address typically provides only the location at which one of any number of devices may be used by any number of individuals (in fact, Doe No. 25 contended that her ex-husband, not she, downloaded the infringing works). If a motion to quash is granted, the account holder’s identity is not revealed, and the claim is effectively dead.

In considering whether to grant an anonymous account holder’s motion to quash a subpoena, courts balance the user’s First Amendment right to act anonymously with the plaintiff’s right to pursue its claims.

Anonymous users can rely on a line of precedent that extends the First Amendment’s protections to online expression. And under Rule 45 of the Federal Rules of Civil Procedure, a court must quash a subpoena if it requires disclosure of protected matter. Thus, to the extent that anonymity is protected by the First Amendment, courts will quash subpoenas designed to breach anonymity.

On the other hand, plaintiffs pursuing their claims can point to precedent holding that the First Amendment may not be used to encroach upon the intellectual property rights of others.

To balance these competing principles and determine whether certain actions trigger First Amendment protection, courts weigh the five factors set out in Sony Music Entertainment Inc. v. Does 1-40:

  • whether the plaintiff has made a concrete showing of actionable harm;
  • the specificity of the discovery request;
  • the absence of alternative means by which to obtain the subpoenaed information;
  • a central need for the data; and
  • the party’s expectation of privacy.

In Wiley, each of these five factors weighed in favor of disclosure of the defendant’s identity. Wiley pled a sufficiently specific claim of copyright infringement, and, without a subpoena, Wiley would have no other effective way to identify potential infringers of Wiley’s intellectual property rights.

At least five other courts within the SDNY have denied motions to quash in similar litigations involving defendants accused of infringing Wiley’s copyrights via BitTorrent. Going forward, so long as copyright holders can satisfy the Sony five-factor test, they will be able to rely on cases like Wiley to ferret out copyright infringers.