Rocky Mountain Internet Users Group
Minutes of the 11 November 2008 meeting, "Securing and Abusing
Internet Domains: Can JoeThePlumber.com Catch a Break?"

About 25 people attended tonight's meeting. Josh Zapin facilitated and
Jeremy Kohler recorded the minutes.

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MEETING SPONSORS

Microstaff (www.microstaff.com) provides refreshments, Copy Diva
(www.copydiva.com) provides the audio-visual equipment, NCAR
(www.ncar.ucar.edu) provides the facility, and ONEWARE
(www.oneware.com) sponsors these minutes.

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ANNOUNCEMENTS
Crispin Porter + Bogusky is a service agency that produces
windows.com, burgerking.com, etc., and is looking for people who know
it all. Project managers, developers, accounting people. Contact HR or
cpbgroup.com and look for postings.

If you have suggestions for topics and/or speakers for any upcoming
meeting, please send them to Josh Zapin. He is currently in hot
pursuit for several speakers for 2009, but always seeks new ideas.

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INTRODUCTION (Josh Zapin)

Domains are really at the core of finding things on line. And being
found is worth a ton. Like everything else, this tool comes at a
price. Imagine you go to Ford.com and find GM info. Ford would be
pretty upset. And many of us just type a domain without going through
a search engine.

The domain exploitation industry is big--that’s where you buy a domain
and then sell it at a premium. Dark Blue Sea owns half a million
domains. Some companies use algorithms that scour the Internet for
what’s hot and anticipate popular domains--and then buy them up even
before you know you want them. Registrars are getting into the
squatting act too. Network Solutions has been accused of buying
domains people have searched for using their search box. I think these
trends are worrisome.

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ABOUT THE SPEAKER

David Schachter (dschachter@...) is an intellectual
property attorney at Sherman & Howard LLC, a 160-person Denver firm.
David’s expertise is in all forms of licensing, sale, protection, and
commercialization of intellectual property and technology development.
He is a member of the Computer Law Association and the Copyright
Society. He also serves on the executive committee of the Metro Denver
Economic Development Corporation. David writes the Legal Bytes column
for the Denver Business Journal and is listed as one of the Best
Lawyers in America for Intellectual Property.

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LINKS

Sherman & Howard: http://www.shermanhoward.com
Denver Business Journal: http://denver.bizjournals.com/denver/

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DAVID SCHACHTER

I’m in the business of protecting people's rights, specifically,
intellectual property (IP) rights. I'm not advocating a position, and
I work both sides of the street. I defend people who feel their
trademarks are being infringed as well those who are accused of
infringement.

Intellectual property laws have been around for hundreds of years, and
now they are trying to find their way with each other. Thirty years
ago no one knew what intellectual property was outside of patents. Now
it's become a commodity--like your brand name--that can be the most
valuable part of a company.

IP falls into any of four subject areas or categories, sometime more
than one. Trademarks, copyrights, Patents, and Trade Secrets all have
their own sets of laws, and that produces a dilemma regarding how to
protect things that fall into multiple categories.

1: Patents.
Patents are for ideas that take the shape of a useful invention with a
practical application. A recent decision blew a hole in
business-method patents like “one-click purchasing.” That kind of
thing was going insane. Patent law goes all the way back to Hammurabi,
in terms of references to rewarding innovation. It’s in our the U.S.
Constitution too. The idea is that you teach the world and we'll give
you a limited monopoly--with the intent to benefit the world, not the
inventor.

2: Trademarks.
Nothing to do with patents. A trademark is how you identify a product
or service in commerce. They help people form associations, like when
you see the golden arches. You immediately know what it represents:
McDonald’s hamburgers. For example, if I ask you “What is LODAL,” who
knows. Change it to KODAK. Now you know.

Trademark (TM) and service mark (SM) are common-law claims that you
have something trademarked. (R) means you have a federal trademark
registration. Federal means you went through a very difficult
application process and you have nationwide exclusive rights.
Common-law trademark is limited by the geographic territory you use it
in. This is very problematic. Courts have still not completely
resolved how territorial rights work on the Internet.

3: Copyrights.
Copyright goes back hundreds of years. It deals with a tangible
expression of ideas: paintings, writings, photographs. Nothing to do
with trademarks, although you can have a copyrighted logo that is also
trademarked. It covers the “right to copy.” What you can't copy is an
author’s expression of an idea, but the idea itself is not protected
so long as you steal the idea in an original way. People steal
software code, for example. If I see the code is identical, then it's
copying. But if you just do the same thing with different, then it
doesn't matter--that’s not copying. You control the means of
reproduction if you own the copyright.

A legal issue is how to prove copying. It can be direct evidence (I
saw you do it), or you can prove copying by showing that someone had
access and produced something with "substantial similarity." There’s
no rule of thumb or litmus test here--you can be sued for just copying
a tiny bit of something.

You don't have to register a copyright until someone infringes. If
it's fixed in any tangible form (as of 1986), it's automatically
copyrighted.

4: Trade Secrets.
This is a catchall: Any form of information in any medium that is both
valuable because it's not generally known (secret); and it's treated
like a secret. Source code is copyrightable, but it's also a trade
secret. Customer information, marketing plans, and financial
information can be trade secrets. There’s no registration needed, but
you have to be really treating the information like a secret. If it’s
on your public website, it’s not a trade secret.
You should rely on an nondisclosure agreement (NDA) to protect a trade
secret. It makes the ability to prove a trade secret a thousand times
easier. It doesn't guarantee that something is a secret though because
it still has to be treated as one.

So why are we here tonight? We are learning the difference between
trademarks and domain names. Domain names are billboards that
represent a product or service, so they can be trademarks. But it’s
not automatic.

How do you get a trademark? Two ways. One is by using the term in
commerce, like “Kodak.” If you only do that, you have a common-law
trademark the moment you start using it. It will be limited to the
geographic territory where you're using it. The goal is get a federal
registration, so you get protected throughout the U.S. There’s no such
thing as a global trademark though.

The problem with trademarks is “likelihood of confusion.” If two
trademarks might be confused by the public, then there's a potential
for infringement. This is designed to protect the public. Trademarks
don’t have to be identical, but there has to be a potential that they
will be confused. To own the trademark you have to go into business
and start using it. You can't trademark “Burger Kyng”you’re your
restaurant because it could generate confusion. Apple Records and
Apple Computer, on the other hand, didn't have much problem until
computers started playing music. You could even have two magazines
with exactly the same name, so long as they are serving completely
different markets--but you have to convince a trademark examiner that
there’s no confusion.

To federally register a trademark:
1: Make sure it actually functions as a trademark. You can't trademark
"hamburger" because it's generic. It has to identify something specific.
2: Make sure it’s original. If someone beat you to it, they may
already already have rights to it. Is someone already using it? It
depends on who got there first. For example, a county in Florida has a
restaurant called “Burger King” that was around before the franchise.
The franchise sued and lost: the court ruled that the Burger King
franchise could never open a restaurant in that county, otherwise it’s
infringing on the original Burger King’s trademark. The geographic
limitation is often fought over.

When considering a trademark, go to USPTO.gov. The trademark office is
very user friendly, and you can search the registered trademark
database. Let's search for Kodak. Yup, about 100 Kodak registered
trademarks. That's one way to search for trademarks--but you have to
search the web too, in case someone is using it without registering.

Note that state fictitious name filings, and state trademarks, may be
evidence of use, but they do not confer substantive trademark rights.

The official statement is that it takes 6 to 9 months for a trademark
registration application to be processed. It takes a really long time.

Theoretically your common-law trademark can apply nationally, but
that’s a dangerous way to go. It’s better to register.

If McDonald’s allowed "McSushi" that would erode the brand, and that's
what the lawyers would argue. You don't want your trademark to become
generic like Xerox’s did.

Purchasing a Domain

So long as a domain name isn't an exact match, you can purchase it. No
one screens them for infringement. The problem is that a domain is
very easy to purchase and is extremely powerful as an identifier. So
they have a big potential to create instant confusion. Courts can't
keep up. 180 million domains now, going up by a million a month.
Trademark laws are woefully unprepared for dealing with domain name
confusion.

So how do you infringe a trademark through purchasing a domain name?

Simplest way is to buy a domain that’s an existing trademark. An early
cybersquatter in the 1980s bought panavision.com. He charged big money
for it and got big money for it. But now the law says that if you are
using a domain in bad faith (not just owning it), that's infringement.
A guy bought peta.org. So People for the Ethical Treatment of Animals
tried to get him to give up the domain, but he wasn't doing anything
with it so he was protected. But then he put a link on his peta.org
website for selling books and he lost on that point--because he was
now using it in commerce in bad faith. The courts start to care when
you're engaged in commerce.

Typosquatting

This is when you buy spelling variations on a trademark, like
“westing-house.com.” You can buy it, and you’re not infringing if
you’re not doing anything with it. But the moment you engage in
commerce with it, Westinghouse can sue you. A recent doctrine is
called “initial interest confusion”: Even a diversion to another page
is enough to damage a trademark.

Now let’s say your family name is “Westing” and you want a website
called Westing-House. That should be fine. But if your name is Wendy
McDonald, you can't be selling hamburgers under either name. You can
still have a website so long as you're not selling burgers with it.

Often there’s a problem when you can't find the owner of a domain when
that info is hidden.

Frontrunning

This is very controversial, and no one has officially acknowledged
that it exists. It’s when a company secretly monitors what domains
people are searching for (in a registrar’s domain search box) and then
buys the domain before the customer gets around to it. Network
Solutions has been accused of this.

Parking.

Let’s say you buy a domain that you think will be attractive to
someone. There’s nothing wrong with that and it’s not cybersquatting.
In 1992 a guy bought Wallstreet.com and sat on it, then sold it for 10
million dollars. No problem there, but if he had directed it to
parking page full of ads for companies that offer financial services,
then it would have been infringement.

Domain parking is legal.

Tasting.
You can buy a domain for a probationary period and then return it
after the period if no one bites.

A guy wanted to buy a domain from a squatter in Hong Kong. I emailed
the owner asking if it was for sale. I got an automated reply saying
it's $6000, not negotiable. Not even dealing with a human here.
Sometimes you can get a domain without being gouged. But usually it
doesn't work that way. And it’s not illegal.

Warehousing

You buy thousands of domains made from common words. Most word combos
are already bought.
All 3-letter domains were gone years ago.

Let’s typosquat, right here right now. I will try to buy... Kodak.com
from Network Solutions. Hmm, they’re all taken on basic extensions. Oh
look, Kodak.biz is available. Other weird extensions aren't taken
either, like Kodak.zimbabwe.com.

kodakk.com? taken. Probably someone smart at Kodak took it. But all
other extensions are available. kkodakkk.com is available. Companies
will buy up all kinds of misspellings, but Kodak didn't buy that one.
So I can buy it, but I can't sell cameras with it. I can't put up a
website with it. So I could buy Kodak.biz, and if did anything with
it, Kodak could come after me. And I can't trademark kkodakkk.

Some registrars allow you to make an offer to domain owners, but
you're begging to be gouged.

Keyword advertising

This isn’t directly about domain names, but it’s a nefarious creature
of the internet. Is it trademark infringement or fair use? An
insurance company competing with Geico put "geico" as key word in
search engines to make the competitor’s ads pop up. Geico sued them
for making commercial use out of the name. The competitor said, No,
I'm making use of a fact. Like putting up a billboard next to Geico's
corporate headquarters. Courts have supported keyword advertising.

If Your Trademark Is Being Infringed

Cybersquatting rules are part of the trademark law. You have to prove
they were trafficking in the domain (making commercial use of it) and
you have to show bad faith, that they have a motive for using it.

All domain owners are required to submit to the Uniform Dispute
Resolution Procedure. The UDRP is part of domain's terms of use
agreement. It’s not a court: All they can do is award the domain name
to the winner of a dispute. Most trademark law is U.S., and it only
applies to the U.S. UDRP is global, and you don't have to find the
owner to initiate a proceeding. If owner doesn't show, they default
and lose the web site.

UDRP is much cheaper than a trademark lawsuit, but you don't get
damages. Also the forms are easy to fill out online. I think it costs
around $1700 to file.

Q&A

Q: I got an email message warning that someone is about my trademark
as a domain name
A: That’s spam, and it’s pretty common.

Q: What if set up "bureauoflandmanagement.com" and sell guns?
A: In that case the government could probably just say it's basic
consumer fraud.

Q: Would you trademark amazon or amazon.com?
A: You can trademark a whole domain name, but you have to show
commercial use of that name. Just putting “amazon” on your door
wouldn’t count.

Q: What's the latest on Network Solution’s alleged frontrunning practice?
A: Well it’s not necessarily illegal. But it might be violating some
commercial protection rule because it's basically spying on customers.

Q: What about registrars who “claim” that an owner didn't renew?
A: They are supposed to be neutral, but some think they can make money
that way.

Q: Isn’t confusion dependent on how many people know about something?
What if it's a brand new business?
A: If I'm suing, my standard of proof is “likelihood of confusion”--I
don't have to produce any actual confused people. It's a very low
standard.