Protecting Business Name and Trademarks on the Internet

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With the Internet and e-commerce growing exponentially and becoming a larger part of our daily lives, protecting your business names and trademarks in cyberspace is more important than ever.

Registering Your Business Names and Trademarks as Internet Domain Names

By now, every business should have registered its business names and important trademarks as domain names on the Internet through Network Solutions, Inc. (NSI) or one of the other recently-approved registrars. Where possible, domain names containing all relevant important words or phrases should be registered in all logical variations (including common misspellings) and in all three of the major commercially-oriented upper-level domain addresses (.com, .org and .net). While this will cost approximately $70 per registration every 2 years, it is a relatively inexpensive way to help protect your business goodwill from so-called “cyber-pirates” who might otherwise register your business names or trademarks before you do so. (While courts have not been sympathetic to cyber-pirates and have usually awarded “hijacked” domain names to the rightful trademark owner, business owners in such cases can incur substantial delays and legal costs to recover their domain names, and in many cases simply decide to pay a reasonable “ransom” instead.)

Even if someone does not intentionally try to poach on your business names or trademarks, there are numerous examples where unrelated businesses or other parties happen to share the same or a similar name or trademark in different areas of commerce. Absent proof that someone is attempting to interfere with another party’s legal rights, the first to register the relevant domain name is generally given priority on its use.

A recent case illustrating this point involved Avery Dennison Corporation, a large Pasadena-based office products manufacturer, which found that a Canadian businessman operating as FreeView Listings had registered www.avery.net and www.dennison.net. The businessman had apparently not registered those domain names in order to trade on Avery Dennison’s goodwill, and therefore did not fit the classic profile of a cyber-squatter. Rather, FreeView Listings appears to have registered thousands of family surnames for use as “vanity” e-mail addresses in order to “lease” those names to individuals who wished to use their family surname as a domain address. In Avery Dennison Corporation v. Sumpton, 1999 WL 635767, 51 U.S.P.Q.2d 1801 (9th Cir. Aug. 23, 1999), the U.S. Court of Appeals for the Ninth Circuit instructed the lower court to enter a summary judgment against Avery Dennison’s attempt to restrain FreeView’s continued use of those domain names.

Earlier this month, relying upon the Avery Dennison decision, a U.S. District Court in Boston ruled against Hasbro, Inc.’s attempt to seize the domain name www.clue.com from a small Internet consulting firm, Clue Computing, which had registered the domain name with NSI in June 1994. Hasbro, which registered domain names scrabble.com and monopoly.com relating to its well-known board games Scrabble and Monopoly, alleged that www.clue.com infringed upon the trademark for its Clue mystery board game. The court ruled in Hasbro, Inc. v. Clue Computing, Inc., 1999 WL 711429 (D. Mass. Sep. 2, 1999), that Clue Computing was not infringing or diluting any legal rights of Hasbro.

Given these examples, all businesses (even those which may not yet be emphasizing e-commerce) should make the relatively nominal investment to register all of their business names and trademarks as domain names. This is particularly important where the business names or trademarks have ordinary English meanings. Furthermore, as part of the normal process of developing new product names, companies should routinely investigate and register related domain names before introducing the product to the marketplace. This will help to ensure that you do not face unexpected problems obtaining related Internet addresses later.

Misuse of Your Trademarks to Trigger Banner Ads for Your Competitors

Another hotly-contested and controversial issue that has arisen recently is the sale by search engines of various “keywords.” Whenever someone uses the “keyword” as a search word or phrase as part of a search conducted by a computer user on the search engine, the “keyword” triggers a banner advertisement above or alongside the search results. For instance, Amazon.com might want to present a banner ad for its Web site to anyone who types in a search request for “books” on the Yahoo or Excite search engine. The sale of keywords for this purpose is controversial, however, when the keyword is the business name or trademark of a competitor. For instance, what if Amazon.com wanted the search engine to display its banner ad whenever someone typed in a search request for the words “barnes and noble”?

While the legality of using keywords in this manner is unsettled, in a recent pair of related cases, Playboy Enterprises, Inc. v. Netscape Communications Corp. and Playboy Enterprises, Inc. v. Excite, Inc., 1999 WL 428233 (C.D. Cal. June 24, 1999), Playboy alleged that the search engines were improperly selling the Playboy and Playmate trademarks to a variety of hard-core adult-oriented web sites whose banner ads appeared whenever a search including “playboy” or “playmate” is made. However, the U.S. District Court in these cases denied Playboy Enterprises a preliminary injunction on June 24, 1999, on the grounds that the words “playboy” and “playmate” are generic words that exist independently of the trademarks held by Playboy Enterprises. Therefore, even with a famous trademark such as Playboy, the rights of the trademark owner cannot make the use of the word in its generic sense unlawful.

Note that the result might be different if the trademark involved is an “arbitrary” trademark , a made-up word or phrase, such as Xerox or Kodak,which triggers a banner ad for a competitor. Indeed, Yahoo and some other major search engines apparently have a policy not to sell “keywords” which are registered trademarks to a competitor of the trademark holder, so if one discovers such a questionable practice, a letter of complaint to the search engine and/or to the competitor involved may solve the problem and stop your competitor from attempting to siphon off your Internet customers.

The District Court’s ruling denying a preliminary injunction in the Playboy case is on appeal to the U.S. Court of Appeals for the Ninth Circuit, and a similar case by Estee Lauder is also pending in New York against Excite, Inc., so additional developments in this controversial area are likely soon.

If you wish to determine whether your business name or a product name is being used as a “keyword” triggering a banner advertisement by a competitor, you can search the major search engines using a very helpful free service called BannerStake & #212; at www.bannerstake.thomson-thomson.com.

New Search Methodology Using Internet Keywords

A relatively new development in this area is the effort of RealNames Corporation to promote an alternative search technology known as “Internet keywords.” For a $100 annual fee, a trademark holder can purchase exclusive rights to an Internet keyword on any web browser or search engine configured with the RealNames system. Currently, Microsoft IE5, AltaVista, LookSmart and a number of others have enabled their sites to recognize RealNames keywords for search purposes. On AltaVista, for instance, the owner of the RealNames keyword should automatically be listed first in the search results from any search conducted using the keyword. Therefore, you may want to purchase your relevant Internet keyword from RealNames before it is secured by someone else. For more information, visit www.realnames.com.

Stacey Olliff and Ken Luer are with Ervin, Cohen & Jessup LLP, in Beverly Hills.