Monday, April 14, 2008

Young entrepreneur (Cameron Johnson) discusses important trademark issue in his book


In his recent book “You Call the Shots” (review is here) young Virginia entrepreneur Cameron Johnson (also a contestant on Oprah’s “Big Give”) discusses a trademark action that was taken against him when he tried to “flip” a domain name as a teenager back in the late 1990s.

He had reserved a name called “PremierAutomotiveGroup.com” after learning that Ford Motor Company was going to introduce a line of that name. He checked and found that Ford had neither registered a trademark nor even a domain name before making the announcement.

Back at the time, the practice was common, and remained so for a few years until more companies “wised up.” It was not considered unethical in the early days of the Internet. Corporations tended to be slow and bureaucratic in registering both domain names and trademarks. It is true that one can easily check uspto.gov for trademarks, but there is some time lag before applications are put up there. To be really safe, one has to do a manual search at the office in Alexandria, VA, and expensive and time consuming and cumbersome process. As a practical matter, if one has taken a “catchy” domain name but cannot use it for a trademark, one should check uspto.gov periodically, as in time a registered mark would appear. The Electronic Filing Date is always later that the Paper Filing Date. One should be careful to check spelling variations, although the uspto.gov website seems to adjust for punctuation and capitalization automatically.

Cameron’s account of the suddenness of the process service by a local sheriff’s deputy (it could have been a private process server or even registered mail; check “serve-em.com”) is interesting, as well as the course of the subsequent litigation and final “out of court” settlement are interesting, and would make for good independent film – except that Ford keeps it a secret, to avoid the public shame. Cameron, in his account, makes a lot of the fact that apparently Ford had neglected to file a trademark with USPTO before the announcement, although it sounds quite conceivable that Ford had done so but that the online check wouldn’t show it yet. (USPTO has gotten faster in recent years, after moving to its new headquarters.) Ford also sued lots of people who had tried to grab domain names, and apparently did not know that Cameron was a minor.

Of course, Cameron is right about one thing: Ford behaved incompetently. One can make up philosophical objections to “amateurism” or to flipping or “squatting” (that latter of which has become objectionable), but any company can prevent this whole problem by registering both the domain names (at a minimum. .com and .biz) and the trademark before making announcement. USPTO has gotten more efficient, but there could be holdups for smaller companies, which will have to show that they really will use the mark for legitimate commerce. (Free content on the web for political purposes doesn’t justify a trademark.) For Ford, there is no excuse for not having done so; it sounds like plain laziness (or, worse, ignorance). How many people in big companies are good at their jobs? I wonder. Courts should not reward inept corporate behavior.

ICANN does have a procedure for resolving domain disputes administratively (link), but ICANN policy specifies that a domain name be registered in “good faith” for the provision of real content, which can be either free content, or commercial transactions (or both), but must have some kind of “substance” beyond mere profit from trading a name itself. A conflict over a name that has been associated with a body of content will probably resolve with some fair consideration to the party offering real content, even if it is “free” (whether or not it has advertising or sponsors).

Trademark law had been revised in the mid 1990s to make “dilution” actionable, and as discussed on this blog, was revised in 2006 to allow trademark holder to take action prospectively against dilution.

There was another case that I’ve discussed before, but it bears mention in comparison to Cameron’s case. That would be Interstellar Starship Services v. Epix. The case is complicated (summary link), but ISS was closely connected to the Clinton Street Theater in Portland Oregon and took the domain name of epix.com, whereas Epix happened to be the trademarked name of an electronics imagining company from the 80s. ISS took on the domain epix.com and eventually prevailed at the Ninth Circuit after years of litigation from Epix (opinion link). As in the Ford case, Epix failed to register a domain name in a timely manner, but it did have a trademark. The Ninth Circuit (in 2002) went into a long discussion of Epix’s desire to establish as a matter of law the idea of “initial interest confusion.” Now, it would seem that the 2006 Revision Act would establish something like that as a matter of law now. However, the justices discuss some important concepts. They say that real dilution can occur across business lines (USPTO generally allows similar marks in different business lines), but any challenge across such lines must be carefully considered as to the facts of the case and as to the practical likelihood that consumers will be misled or confused. In this case, the Court did not believe that this existed. Confusion is less likely with the use of a common English word(s) or phrase than with a specific or unusual proper name. If a name has been used in commerce before by differing entities (as was true of Epix), then a claim of actual or prospective infringement (in the sense of the 2006 law) is weaker.

I traded emails with someone involved with Clinton Street Theater in 2000, and discussed this with a law student friend who now is a prosecutor in a Midwestern city.

Of course, this brings us back to a core problem: what are the legal and ethical ramifications of an “amateur” taking on a catchy phrase for a domain name in order to be easily found and remembered. One factor could also be how unusual the person’s name is: common names are likely to be confused as domain names and trademarks (people have been precluded from using their own names as domain names when they match the names of celebrities; hard to spell “foreign” names will be hard to remember and tend to encourage using common words or socially meaningful phrases). An important concept seems to be the use of the name to provide legitimate content, commercial transactions, or both. It is still common to find domain name parking (usually set up as a series of links to generate ad revenue or even sometimes “link spamming”; in rarer cases, these “fake domains” may transmit viruses or house unsafe downloads or try to misuse the name of a well known legitimate company to generate spam -- email sender spoofing would sound like a kind of trademark infringement!) both with TLD’s and deliberate misspellings (a least one TLD derivative of my own domain has been parked); but trademark holders generally can challenge these. Website safety rating services (like McAfee Site Advisor or the newer Web of Trust) are likely to flag these. The practice is perhaps more silly than it is really harmful.

Picture: As Cameron points out in his book, a businessman must become his own "brand." So, yes, under the right circumstances, you can trademark your own name (if you use it to do business, and it isn't a duplicate). From the USPTO Expo (previous post).

No comments: