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Technology Law Source

Mapping the evolving legal landscape

Protecting your brand in the age of gTLDs dot sucks

Posted in gTLDs, Intellectual Property, Trademarks

ICANN has made it possible to serve up every brand owner’s worst nightmare; welcome to [yourbrand].sucks. ICANN and registries of new gTLDs have painted a rosy picture of the new Internet landscape, advocating that the introduction of new top level domains, like .app and .restaurant is a way to increase choice and competition. Unfortunately, the introduction of the new gTLDs has created a harsh reality for brand owners who are forced to decide how far they are willing to go to protect their valuable brands through the preemptive purchase of domain names with otherwise undesirable gTLDs.

Would-be gTLD domain registries were required to pay at least $175,000 to obtain the right to offer domain names with a new gTLD of their choice, so it was understood that the cost to domain registrants for a second level domain wouldn’t necessarily be cheap. Plus, the registrars need to mark the prices up to account for integration, registration and the continued maintenance of the domains. When brand owners find themselves paying top dollar for second level domain names only for the purpose of preventing someone from disparaging their brand, exorbitant registration costs may feel like blackmail. Continue Reading

Sixth Circuit adopts broad view of trade secret preemption

Posted in FTC issues, Intellectual Property

The Sixth Circuit Court of Appeals recently took a broad view of preemption under the Uniform Trade Secrets Act (UTSA) and held that Ohio’s version of the UTSA preempted state-law claims for tortious interference with prospective business relationships and conspiracy to misappropriate trade secrets because those claims arose from the same set of facts as a trade secret misappropriation claim. Stolle Machinery Co., LLC v. RAM Precision Industries, No. 13-4103 (6th Cir. Mar. 16, 2015). In reaching its holding, the Sixth Circuit noted that federal and state courts across the nation are divided about the scope of trade secret preemption under the UTSA, and the Supreme Court of Ohio has not yet addressed this issue.

The UTSA provides for damages and injunctive relief to a plaintiff whose trade secrets have been misappropriated. The UTSA contains a preemption clause that preempts “conflicting tort, restitutionary and other laws” of a state which provide civil remedies for misappropriation of a trade secret. Continue Reading

Online advertiser denied immunity under Section 230 of the CDA for permitting use of fake news sites by affiliate marketers

Posted in FTC issues

A federal court recently agreed with the Federal Trade Commission (FTC) that an advertiser should be held accountable for the deceptive acts and practices of its affiliate marketers, and ordered that the advertiser disgorge the entire $11.9 million in payments it received. The court held that the advertiser violated Section 5 of the Federal Trade Commission Act (FTC Act) as a matter of law because its affiliate marketers used “fake news sites” to promote products sold online. According to the court, “no reasonable jury could deny” that the advertiser “both participated in, and had the authority to control, the affiliate marketers conduct in so far as it related to the fake news sites.” The court also held that the advertiser was not entitled to immunity under Section 230 of the Communications Decency Act (CDA). Federal Trade Commission v. LeanSpa, LLC, No. 3:11-CV-1715 (D. Conn. Mar. 5, 2015).

The advertiser, LeadClick Media, Inc. (LeadClick), “fiercely disputed” that it had the authority to control the affiliate marketers, and that it was responsible for creating or developing the deceptive content provided on the fake news sites. Even though LeadClick did not create the fake news sites, the court denied LeadClick Section 230 immunity because LeadClick knew that its affiliate marketers used fake news pages, had communications with these affiliate marketers regarding what products to advertise, screened advertisements according to merchants’ preferences, and provided affiliate marketers with a way to direct consumers from genuine news sites to fake news sites. Continue Reading

CRTC claims its first victim under Canada’s anti-spam law

Posted in Information Technology, Privacy

Canada’s anti-spam law (CASL), enforced by the Canadian Radio-television and Telecommunications Commission (CRTC), requires that businesses and organizations secure a recipient’s express or implied consent before sending “commercial electronic messages” (CEM). A CEM is any electronic message that encourages participation in a commercial activity, such as a coupon or message about a promotion of the organization, an e-vite, and newsletters sent using email, text messaging or certain forms of messages sent through social networks. The legislation imposes severe fines for non-compliance and leaves open the possibility for private or class actions for damages. CASL has been deemed one of the toughest pieces of anti-spam legislation.

The biggest feature of CASL is the consent requirement, which requires Canadian and global organizations that send CEMs within, from or to Canada to obtain consent from recipients before sending the messages. This requirement does not apply to CEMs merely routed through Canada. The requirement only applies to communications sent to electronic addresses.

Consent may be obtained expressly or may be implied, and it is imperative that an organization, which has the burden of proving that consent was obtained, keep records as to how it obtained consent. Continue Reading

gTLD update: .adult and .porn on the horizon

Posted in Intellectual Property, Trademarks

The Internet was in a tizzy back in 2011 when ICM Registry began selling .xxx domain names for use by adult entertainment providers, selling nearly 250,000 addresses and netting more than $50 million. Just last year the registry sold sex.xxx for $3 million dollars, the highest price paid for a non-dot-com address. Which leads us to wonder if the addition of .adult and .porn will generate the same concerns and profits. ICM Registry has set aside nearly 1,000 domain names such as sex.porn, hoping to replicate the success they had with .xxx. But the concern for many trademark holders, as was the case with .xxx, is how to protect their brands during the launch of .adult and .porn?

ICM Registry has set up an elaborate registration period, in effect now through the launch to the general public, which is expected in early June. The two gTLDs opened their Sunrise periods March 2, which will give trademark holders who are registered in the Trademark Clearinghouse (TMCH) the opportunity to secure their registered trademark within the new top level domains.  Domains names are available on a first-come, first-served basis to validated marks in the TMCH. The cost of registration fees will be the standard registration fees without any additional sunrise application fees.

Once the Sunrise period has closed, .adult and .porn will launch a Sunrise B period from April 6 to April 30 for .xxx Sunrise B applicants. Sunrise B applicants consist of trademark owners who participated in the .xxx Sunrise B Program and are given a priority option to register matching marks in .adult and .porn before the gTLDs become available to the general public.  Following these periods, the gTLDs will open a Domain Matching Program set for May 6 to May 31. During this time, any .xxx registrants can secure available second level domains in .adult and .porn for which they hold a valid .xxx registration. To participate in this phase, a .xxx name must be registered by April 30. Once completed, general availability will begin June 4. Continue Reading

Court considers the role of social media in class action cases

Posted in Social Media

Our colleagues at the Employer Law Report blog report that Gawker Media LLC has asked a district court to limit plaintiff’s use of social media for providing notice of a class action lawsuit to potential class members. With concerns about maintaining objectivity and the possibility that plaintiff’s complaints could go viral,  the case presents a new frontier for class action notification, and could have an impact on group sizes, public awareness and impartiality. Read the complete article.

Expediting patent examination in the United States

Posted in Intellectual Property, Patents

Though the U.S. Patent and Trademark Office (USPTO) has reduced patent prosecution time a bit during the past five years, it still takes, on average, at least 18 months before the patent examiner acts upon an application. Throw in two or more office actions, and the average pendency of a patent application is more than three years from the filing date to either issuance or abandonment. However, a number of programs are available that can significantly reduce prosecution time.

Track One prioritized examination (PE) was introduced in September 2011 and provides expedited examination of a patent application for an additional fee. Though the additional fee is $4,140 ($2,070 for small entities), examination is significantly compressed. On average, PE results in either a notice of allowance or a final rejection in about seven months. Applicants must request PE at the time the application is filed, or at the time a request for continued examination (RCE) is filed.1

Accelerated examination (AE) also continues to be available, but is generally less desirable than prioritized examination. An AE petition only requires an additional fee of $140, but the other requirements are burdensome. In particular, the applicant must not only conduct a patentabilty search before filing the application, but also submit an Examination Support Document (ESD). The ESD must identify where each claim limitation is supported in the specification and describe how each claim is patentable over the closest prior art — including identifying any claim limitations that are disclosed in the prior art. As a result, many applicants will find prioritized examination to be the more affordable option. In addition, the information required to be included in the ESD may affect patent scope during enforcement proceedings against infringers. Continue Reading

Katy Perry’s left shark

Posted in Copyright, Intellectual Property

By now, you probably have heard of the infamous “left shark” in Katy Perry’s Super Bowl XLIX halftime show, who went off script and did its own moves during “Teenage Dreams” and “California Gurls.”

So much buzz built about the shark that a 3D printing service, Shapeways, starting offering Left Shark models online, which prompted a letter from Perry’s attorneys insisting that the service stop sales immediately, claiming that the shark character was protected by copyright.

Shapeways sent a response stating that it did not appear that Perry owned the copyright for Left Shark (because a copyright is owned by the “author,” in this case the costume designer, and she did not design the costume), and that she had no basis because courts have held that costumes are useful articles and, thus, ineligible for copyright protection.

But wait! Though a costume may be classified as a useful article, courts also have held that design elements that are separate from the function of “clothing” are eligible for copyright. In fact, the U.S. Copyright Office lists a registration for “Shark costume; Children’s shark costume” (VA0000624682) owned by the Children’s Museum of Indianapolis.

Whether Perry does, in fact, own the copyright is yet to be determined, but this exchange is a lesson for business owners who send cease-and-desist letters without thinking about the consequences. In the past few days, the Internet has spiked with anti-Perry comments, and the model has been downloaded more than 11,000 times. Probably not the result Perry desired.

Leading European privacy law conference points to key themes, suggests strategic directions

Posted in Data Breach, Information Technology, Privacy

A few weeks ago, more than 1,000 academics, legal practitioners and government officials convened for one of Europe’s premier privacy law events: the Computers, Privacy and Data Protection (CPDP) conference in Brussels, Belgium. Europeans dominated this crowd but a significant number of participants from other countries, including the U.S., made this a truly international gathering. I was fortunate to attend the conference and be able to present on two panels: “The EU-U.S. Interface: Is it Possible?” and “Privacy by Analogy.” This article provides an overview the conference, identifies the main themes that emerged from the three days of panels and discussions, and draws a few strategic conclusions for a U.S. audience.

Led by Professor Paul de Hert, faculty and graduate students from the Free University of Brussels (Vrije Universiteit Brussel) organized much of the CPDP conference. Leading companies, law firms and public interest groups — including Google, Microsoft, Deloitte, epic.org, HP, Intel and others — sponsor the event. An array of universities and other entities organize the 70 panel discussions that form the backbone of the conference (videos of many of these panels are available online). American universities and organizations are getting more involved. This year, Yale, Fordham, the University of Washington and the U.S.-based International Association of Privacy Professionals (IAPP) each sponsored a panel.

Viewed as a whole, the panel topics offer insight into the key themes that are of concern in European and international privacy law circles. Continue Reading

The saga of strict de novo review of patent claim construction comes to an end — U.S. Supreme Court tweaks the standard of appellate review

Posted in Intellectual Property, Patents

As we reported last year, one of the issues that has divided the U.S. Court of Appeals for the Federal Circuit (the CAFC) for nearly 20 years is the proper standard of appellate review of patent claim construction rulings. No less than four CAFC en banc decisions addressed the issue. In each instance, the majority applied a strict de novo standard for appellate review with no deference to the trial court even with regard to underlying factual determinations, while vigorous dissents objected to this standard.

The dissenters have been vindicated, as the Supreme Court has now held that a trial court’s underlying factual determinations with respect to extrinsic evidence used in patent claim constructions must be reviewed on appeal under the clearly erroneous standard. This decision should, at least in theory, result in an increase in claim construction affirmances by the CAFC. It remains to be seen, however, whether there will be a significant increase.

Patent claim construction basics1

The scope of a patent is defined by its claims, and construing those claims is the heart and soul of nearly all patent litigation. The meaning of the words and phrases used in the claims  is critical to not only the question of infringement, but also patent validity.

The task of construing the meaning of patent claims is a question of law for the court — not a jury — to decide. Markman v. Westview Instruments, Inc., 517 U.S. 370, 390-91 (1996). Claim terms are given their ordinary and customary meaning to a person of ordinary skill in the relevant art. Phillips v. AWH Corp., 415 F.3d 1303 (Fed. Cir. 2005). The ordinary meaning is not determined in a vacuum, however, as claim terms must be interpreted in the context of the patent as a whole, including the specification (i.e., the written description and drawings that precede the claims in a patent). The court also considers the prosecution history of the patent, particularly if the patentee made statements reflective of a narrower definition of a claim term than might otherwise be the case. Continue Reading