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Pirates and Protocols: Trademark Use and Protection on the Internet. Wednesday, March 18, 2009 7:00 p.m. New York City Bar Association 42 West 44th Street New York, NY. Pirates and Protocols: Trademark Use and Protection on the Internet. Moderator Monica Richman, Partner
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Wednesday, March 18, 20097:00 p.m.New York City Bar Association42 West 44th StreetNew York, NY
Monica Richman, Partner
Sonnenschein Nath & Rosenthal LLP
Mark Fiore Erik Walsh
Weil, Gotshal & Manges LLP Arnold & Porter LLP
Counsel for eBay, Tiffany v. eBay Counsel for Tiffany, Tiffany v. eBay
Heather Greenberg Mitchell Stein
Associate General Counsel Partner
The Topps Company, Inc. Sullivan & Worcester LLP
Jonathan Sirota Kevin Taylor
Secretary & Director of Legal Affairs Partner
SmartMoney Taylor & Mrsich, LLP
TIFFANY & CO.
Why Sue eBay?
the sale of counterfeit Tiffany silver jewelry items by
sellers on the eBay website
availability of Tiffany goods via promotions on its
website and via “sponsored links” on search engines
such as Google and Yahoo
Context: eBay’s Website
to 100 percent
allegedly did not respond to a report and thus required Tiffany to follow up (based on nearly 300,000 reported listings)
“[I]f a manufacturer or distributor intentionally induces another to infringe a trademark, or if it continues to supply its product to one whom it knows or has reason to know is engaging in trademark infringement, the manufacturer or distributor is contributorially responsible for any harm done as a result of the deceit.”
Inwood Labs., Inc. v. Ives Labs., Inc., 456 U.S. 844, 854 (1982).
“generalized knowledge that copyright infringement may take place
in an Internet venue is insufficient to impose contributory liability.”
standard “watered down and incorrect,” the District Court held that the Restatement did not govern: “Tiffany’s argument is foreclosed by Inwood itself.”
including both new and vintage silver jewelry, sometimes in lots of five or more.”
Advertising targeted to a specific individual based on that person’s web-surfing behavior.
With behavioral advertising, this means that two people could see vastly different ads when viewing the identical webpage at the same time.
What is contextual advertising?
• “Keywords” are pre-identified relevant terms that are used to trigger appropriate “contextual advertising.”
• Keywords can be either generic terms or trademarks (e.g., “cars” and “insurance”; “Ford” and “GEICO”).
• Contextual advertising providers, such as adware companies and search engine providers, program their systems to match interested consumers to contextual advertising based on keywords.
• Under the contextual advertising model, advertisers bid on “keywords” that an Internet user might enter in a search query. The search engine then matches the advertisement and sponsored hyperlink to the keyword the advertiser purchased. When an Internet user enters the keyword as a search, it triggers the sponsored link to appear on the search results page either to the right or immediately above the natural search results.
The practice should be considered a permissible noncommercial use or fair use of a trademark that places an advertisement in front of a potential purchaser, which is no different from other types of competitive / comparative advertising.
Trademark Owners’ Position:
Many trademark owners consider the use of their marks as keywords to constitute infringement or unfair competition that improperly diverts Internet traffic from their sites and confuses consumers about the source of the products they encounter via pop-up ads, banners and sponsored search results.
But does the sale of trademarks as keywords to trigger ads represent “use” in commerce, a prerequisite to an infringement cause of action under the Lanham Act?
Trademark infringement claims under § 32(1) of the Lanham Act, 15 U.S.C. § 1114(1)2, require that the plaintiff establishes that
(1) it has a valid mark that is entitled to protection under the Lanham Act; and that
(2) the defendant used the mark,
(3) in commerce,
(4) ‘in connection with the sale . . . or advertising of goods or services,’ 15 U.S.C. § 1114(1)(a),
(5), without the plaintiff\'s consent.”
The plaintiff must also show that the defendant\'s use of that mark “is likely to cause confusion . . . as to the affiliation, connection, or association of [the defendant] with [the plaintiff], or as to the origin, sponsorship, or approval of [the defendant\'s] goods, services, or commercial activities by [the plaintiff].” 15 U.S.C. § 1125(a)(1)(A).
Courts are split on whether the sale and/or purchase of another\'s trademark as a keyword constitutes use of the mark in commerce.
Does not constitute “Use in Commerce”
Fragrancenet.com Inc. v. Fragrancex.com Inc., 439 F. Supp. 2d 545 (E.D.N.Y. 2007) (12 ECLR 653, 7/18/07)
Site Pro-1 Inc. v. Better Metal LLC, U.S. Dist. LEXIS 34107 (E.D.N.Y. May 9, 2007) (12 ECLR 459, 5/16/07)
Merck & Co. v. Mediplan Health Consulting Inc., 431 F. Supp. 2d 425 (S.D.N.Y. 2006) (11 ECLR 375, 4/5/06)
Does Constitute “Use in Commerce”
Government Employee Ins. Co. v. Google Inc., 330 F. Supp. 2d 700 (E.D. Va 2004) (9 ECLR 772 9/15/04)
Google Inc. v. American Blind and Wallpaper Factory Inc., No. 03-05340 (N.D. Cal. March 30, 2005) (10 ECLR 361, 4/6/05)
Buying for the Home v. Humble Abode LLC, D.N.J., No. 03-2783, 10/20/06
Initial Interest Confusion
In 2004 the Ninth Circuit held - without addressing the "use in commerce" question - that the use of trademarks to trigger the display of banner advertising creates initial interest confusion (Playboy Enter. Inc. v. Netscape Communications Corp.,354 F. 3d 1020 (9th Cir. 2004) (9 ECLR 55 1/21/04)
International Profit Associates, Inc. v. Paisola, 461 F. Supp. 2d 273 (D.N.J. 2006)
Edina Realty Inc. v. MLSonline.com, Civ. 04-4371, 2006, WL 737064 (D. Minn. March 20, 2006)
Storus Corp. v. Aroa Marketing Inc., 2008 WL 449835 (N.D. Cal. Feb. 15, 2008)
• Self-Regulatory Principles For Online Behavioral Advertising (“Principles”) - Federal Trade Commission staff report issues on February 12, 2009.
• Online Behavioral Advertising “means the practice of tracking a consumer’s online activities over time – including searches the consumer has conducted, the web pages visited, and the content viewed - in order to deliver advertising targeted to the individual consumer’s interests”
• FTC – First Party Behavioral Advertising “is behavioral advertising by and at a single website, which practice is more likely consistent with consumer expectations, and less likely to lead to harm than other forms of behavioral advertising”
• FTC – Contextual Advertising is “advertising based on a consumer’s current visit to a single web page or single search query that involves no retention of data about the consumer’s online activities - beyond that necessary for the immediate delivery of an ad or search result – is likely to be less invasive than other forms of behavioral advertising.”
• First Party and Contextual Advertising:
• Fall outside the scope of the Principles
• Still subject to other laws and policies that impose obligations regarding the collection of data
• FTC – Personally Identifiable Information and Non-Personally Identifiable Information “in context of behavioral advertising, rapidly changing technology and other factors have made the line between personally identifiable and non-personally identifiable information increasingly unclear.”
• The Principles are designed to serve as the basis for industry self regulatory efforts to address privacy concerns regarding the following four (4) aspects of online consumer data collection:
First Aspect: Transparency and Consumer Control
• Meaningful disclosure to consumers about the practice of behavioral advertising
• Disclosure via a prominent link attached to each targeted advertisement served or that is placed on the home page linking to a page describing behavioral advertising practices
• A choice to opt out should be easily accessible
Second Aspect: Reasonable Security and Limited Data
Retention for Consumer Data
• Reasonable data security measures so that behavioral data does not fall into the wrong hands
• Retain data only as long as necessary for legitimate business or law enforcement needs
Third Aspect: Affirmative Express Consent Before For
Material Changes To Existing Privacy Promises
• FTC understands that businesses have a legitimate need to change their privacy policies on a prospective basis to engage in new advertising practices
• Companies are bound by promises made to consumers at the time of data collection regarding how such data is collected, used, and shared
Third Aspect Continued
• “Material” refers to uses of behavioral data that are materially different from promises made at the time the data was collected
• “Retroactive” and “Material” changes to privacy policies require affirmative express consent
• However, the Principles do not list any specific mechanisms that are sufficient to constitute affirmative consent
Behavioral Advertising Guidelines
Fourth Aspect: Affirmative Express Consent To (Or
Prohibition Against) Using Sensitive Data For Behavioral
• “Sensitive Data” – is data such as information about children, medical information, account numbers, sexual orientation, or finances
• Note: Certain data may also be subject to obligations under other policies or laws, such as children’s data (COPPA), health data (HIPAA), and financial data (GLB).
Source – February 2009 FTC Staff report titled “Self-regulatory Principles For Online Behavioral Advertising”
• IAB\'s Board of Directors Adopts Privacy Guidelines for Interactive Advertising
• Applicable to Internet media companies, ad serving organizations and rich media vendors
• Meant to be an addendum to the existing IAB standard terms and conditions