Trademarks on the Internet

Copyright 1998 by Ronald B. Standler



Table of Contents

introduction
domain names
my suggestions for new domain names
misdirection of search engines
links
copying
parodies and commentary
Conclusion

Introduction

This document is a brief sketch of some problems with trademark law that have erupted on the Internet. This document is not a summary of trademark law. If you are concerned about possible trademark infringement, contact an attorney who is licensed to practice in your state and who is familiar with trademark law and cyberspace law.

My last search for trademark cases was in March 1998. Because none of my clients have been interested in trademarks, I have stopped following trademark law. I have continued to post this essay from 1998, because the history and facts continue to be valid and useful.

domain names


Addresses on the Internet are a series of four numbers that are difficult to remember. For example, the address for my site on the Internet is:
        http://209.197.98.67/
A domain name server (DNS) performs translations between easy-to-remember character names and the numeric addresses. For example, my site has a domain name rbs2.com, which is my initials followed by a "2". I chose a "2", because a law firm in Vancouver, Canada had already registered rbs.com, and because an office interior planning company in Munich, Germany had already registered rbs1.com, so I simply registered the next available number: 2.

A typical character name has three parts, for example:   www.name.com
  1. "com" is the top level domain (TLD) name
  2. "name" is called the second level domain (SLD)
  3. "www" is the host

Trademark disputes arise with the SLD. There are a limited number of TLD names, which were chosen when the Internet served the academic community and was essentially noncommercial.

In the USA, the following are the possible TLD names:
In the remainder of the world, the TLD name is generally a two-letter country code, for example: A complete list of country codes is given at IANA.

The SLD is chosen by the user who registers the name. The organization that assigned SLD names gave them on a first-come, first-served basis, without checking a trademark registry. As a result of this neglect of trademark law, a few individual people registered famous trademarks and names of major corporations. When the trademark owner or corporation later applied for their name as a SLD, they were denied that SLD name, because that name was already assigned.

These conflicts were of several kinds:
  1. People who reserved the SLD in good faith, without intent of infringing a trademark and without intent of preventing a "rightful owner" from using that name.
  2. People who reserved the SLD, then put an essentially content-free homepage at that address that typically said "contact me if you want to use this domain name." They offered to transfer the SLD for a fee, typically between US$ 1000 and $ 13 000. These people are called "entrepreneurs" if you admire them, and "cybersquatters" if you despise them. Given that registration of a SLD was only US$ 100, including the first two years of use, the cybersquatters made a neat profit, as well as antagonized major corporations. The leading court cases of this type are Panavision v. Toeppen, 945 F.Supp. 1296 (C.D.Cal. 1996) and Intermatic v. Toeppen, 947 F.Supp. 1227 (N.D.Ill. 1996).
  3. Intentional misdirection. Company Nr. 1 registered the name of its major competitor (i.e., Company Nr. 2) as a SLD name. Then Company Nr. 1 put up a homepage at that site that criticized Company Nr. 2. The leading case of this type is Kaplan v. Princeton Review, which was resolved in arbitration by ordering Princeton Review to surrender the domain name kaplan.com to Kaplan Educational Center.
The purpose of trademark law is to clearly identify the source of goods or services, so that consumers can choose reliable suppliers without being confused. Only the owner of a trademark is entitled to use that name, which avoids confusion of the source of goods or services. If the owner of a trademark licenses that mark to another company or person, the owner must monitor the quality of the licensee, or the trademark will be considered legally abandoned.

Similarly, only the corporation has the right to use its name to identify itself. A person who, without authorization, uses the name of a corporation is arguably an imposter, who perpetrates a fraud, by passing themselves off, or holding themselves out, as the corporation.

Aside from legal issues, it is convenient for users to be able to guess domain names, instead of using a search engine and wading through dozens of irrelevant hits. For example, if one wants to go to the website operated by Adaptec, a company that makes interfaces for personal computers, one simply types:
     www.adaptec.com

However, just there are many people with the same last name, there are companies with the same or similar names. For example, if one were looking for Delta Airlines, one might type the URL:
     www.delta.com
but that URL in 1997 took one to the site of deltaComm, a software developer in North Carolina. The correct URL for Delta Airlines in 1997 was:
     www.delta-air.com
This is an example of a good-faith prior use of a SLD name. Sometime prior to Oct 2000, Delta airlines acquired the www.delta.com domain name.

Similarly, I would expect www.ama.org to go the American Medical Association, but it goes to the American Marketing Association. The American Medical Association is at www.ama-assn.org

The largest airline in Canada, Air Canada, has a website at www.aircanada.ca. In January 2000, Priceline discount airline tickets had a web address of www.air-canada.com, which URL seems designed to intercept some Internet users who were trying to find Air Canada.

Incidentally, the issue of personal jurisdiction on the Internet seems to have been solved in a domain name case, Zippo Mfg. Co. v. Zippo Dot Com, 952 F.Supp. 1119 (W.D.Penn. 16 Jan 1997); cited with approval in Cybersell, 130 F.3d 414, 418-419 (9thCir. 2 Dec 1997).

search of trademarks

Before registering a new domain name, an entrepreneur would be well advised to do a search of registered trademarks at the U.S. Patent & Trademark Office to find possible conflicts. Such a step is analogous to doing a title search prior to purchasing land, a step that every prudent mortgage bank would require. If one registers a domain name that infringes a previously existing trademark, one can expect – sometime in the future – to receive a "cease and desist" letter from the rightful owner of the trademark that demands that one turn over the domain name. Receiving such a letter causes dismay and great anguish to someone who has invested thousands of hours of their time in a website, only to discover that they can not continue to use "their" domain name.

Many businesses that have registered trademarks still do not have a website (i.e., they are not using their registered trademark as a domain name). Nevertheless, the apparent availability of their domain name does not permit one to register that name and then use it in commerce to provide similar goods or services, as such use of the domain name would be trademark infringement.

A search of one name at the U.S. Patent & Trademark Office costs a few hundred dollars. As indicated above, the results of such a search can avoid inadvertent infringement of a trademark, and future forfeiting of that domain name.

my suggestions for new domain names


In the case of real property (i.e., land) there is only one registry of deeds for any one place, so it is easy to see who has legal title to land. In the case of trademarks, each country has a national registry: in the USA the registry is maintained by the U.S. Patent & Trademark Office. I suggest that we:
  1. abolish TLDs for commercial sites (i.e., com, org, edu) and make every new TLD of a commercial site be a country code.
  2. require the registry of domain names to check the proposed name of any commercial site against the national trademark registry in the country identified in the TLD.

In the case of confusion between domain names, each site should put a directory on its homepage(s) with annotated links. This may be an awkward solution, but it does end any misdirection, intentional or unintentional. And this solution is less awkward than users being at the wrong site with no direction for how to get to the site that they want.

misdirection of search engines

By placing competitors' names in the header of an HTML document
    <META NAME="KEYWORDS" CONTENT="competitor's name">
some search engines will return the document when a user searches for the competitor's name. The header of an HTML is invisible to most users of a browser, although a sophisticated user could examine the HTML code and see the misdirection.

A company could put names of competitors in an HTML document (e.g., list the competitor in a <H#> tag in a comparison of features). This might also result in misdirection to search engines.

Misdirection could be litigated under the federal statute for dilution of a famous mark, 15 USC § 1125(c), or under the federal statute for causing confusion, mistake, or deception, 15 USC § 1125(a)(1)(A).

Injunctions have been issued against use of a competitor's trademark in the META KEYWORD tag:

links

When I first heard about lawyers' concern over use of links on the world wide web, I was baffled. Why would anyone object to someone else providing a link to their page? Links increase exposure of pages to a wider audience, thereby sharing information with more people, which is the principal reason for the existence of the Internet. But there are instances where links may not be appropriate.

The link from site A to site B could imply that A endorses B, so a user who encounters problems with B could sue A for the bad "recommendation". This problem is particularly acute in professional context, in which a physician, attorney, engineer, accountant makes a recommendation as part of a professional relationship with a client.

If B is a prestigious site (e.g., government, major university, famous corporation), a link from site A to B might imply that B endorses A. For example, a computer repair shop might say
     "We repair <A HREF="http://www.ibm.com/">IBM</A> computers."
which might imply that the shop has a special relationship with IBM to repair IBM computers (e.g., special training of technicians by IBM, certification by IBM, IBM pays for repairs at the shop during warranty, etc.).

The first page of many so-called adult sites on the Internet has a question about the user's age (e.g., "Are you at least 18 y of age?") or willingness to view sexually explicit images. Clicking on "yes" sends the user into that site. But clicking on "no" often sends the user to another site, for example: www.disney.com    This use of a link is inappropriate for two reasons:
  1. It burdens the destination site with traffic that did not choose to go to that site, so the response time for genuine users of that site is slowed.
  2. The user is transported to a site where the user does not want to be.
Clicking on "no" should return the user to the previous page or display a message to press the BACK button on the browser twice.

copying

Parts of the display from site A (e.g., graphics, text in frames) can be imported from site B. This is inappropriate for several reasons:
  1. it increases the traffic at site B, without necessarily benefitting B
  2. it slows the response for users of site A, compared to fetching all items from A's computer
  3. it could be passing off B's work as A's: a violation of copyright and unfair competition laws.
If material from site B is to be displayed on site A, then A and B should have a written agreement that clearly specifies permission or a license to use B's material on A's site.


parodies and commentary

The Internet has given individual people the power to be a publisher who easily provides criticism and commentary on any topic. Before the Internet, a person needed to purchase space in a newspaper or purchase time from a radio or television station, which was prohibitively expensive for most people. A natural outgrowth of this new ability is that a few unhappy consumers have posted material on the Internet that is highly critical of the goods or services of a trademark owner.

For example, the registered trademark for "Bally Total Fitness" was displayed with the word "sucks" superimposed. Such use is neither trademark infringement nor trademark dilution, as explained in Bally Total Fitness v. Faber, 29 F.Supp.2d 1161 (C.D.Cal. 1998). Dicta in that case at page 1165, n.2, suggests that a critic could even legally register the domain name www.ballysucks.com. While the trademark owner will be understandably exasperated, such a result is required by the First Amendment to the U.S. Constitution, which protects criticism and parody. Moreover, consumer critics are not using the [altered] trademark in commerce (i.e., to sell goods or services), while trademark infringement and dilution statutes 15 USC §§1114, 1125 plainly require an infringing or diluting use be in commerce.

Therefore, the Acme Corp. might be well advised to register the domain names acmesucks.com and acmestinks.com, as well as likely misspellings (e.g., Acme.com and acem.com) and the same second-level domains (SLDs) with the TLD .org. The annual cost of these extra domain registrations is less than one afternoon of an attorney's time to explain trademark law to Acme! Further, Acme could post simple webpages directing everyone to the main Acme site, so that consumers searching for Acme eventually get to the proper webpage. The pages at acmesucks.com and acmestinks.com might contain some advice not to disparage registered trademarks.

Indeed, on 12 Feb 1999, a supporter of George W. Bush, a candidate for U.S. President in the year 2000, registered www.bushsucks.com and more than 60 other names, to prevent his opposition from using these domain names.

parodies

Back in 1996, there was a website www.microsnot.com that was a parody of Microsoft, including the stylized script of the Microsoft corporate name. This site apparently disappeared in mid-1997. One of the interior pages at the Microsnot site included the following:
Microsnot Acquires England
Microsnot is pleased to announce the acquisition of Englandtm, a leading country. England will bring many competitive advantages to Microsnot including the world's leading language, some prime real estate, and a strong military.

Microsnot has announced plans to continue offering England's products in America and abroad, with some minor changes to the license terms.

These changes include:
1. Englishtm will no longer be made available on a Public Domain basis. All users of Englishtm must register with Microsnot. A trial version of Englishtm will be made available with a limited vocabulary.
....

There is abundant case law, beginning prior to the popularity of the Internet, that such parodies are protected under the First Amendment to the U.S. Constitution: Parodies that appear on the Internet are even stronger cases for freedom of speech, since parodies on the Internet are not offered in connection with the sale of any product (e.g., magazine, tee-shirt, poster), hence there is no use in commerce, which is an essential element of trademark infringement or trademark dilution.

Conclusion


Law in the use of trademarks and copyright on the Internet is not yet well developed. However, it may be easy to avoid liability by scrupulously

http://www.rbs2.com/tm.htm
modified 8 April 2002, links updated 27 Feb 2010
My last search for trademark cases was in March 1998.

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