INTELLECTUAL PROPERTYDESK REFERENCEPATENTS, TRADEMARKS, COPYRIGHTS AND RELATED TOPICS

WWW.KILPATRICKSTOCKTON.COM

TRADEMARK & COPYRIGHT

Internet Branding

Judith A. Powell, Georges Nahitchevansky, James A. Trigg, Charles H. Hooker III, and Allison M. Scott

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Internet BrandingJudith A. Powell, Georges Nahitchevansky, James A. Trigg, Charles H. Hooker III, and Allison M. Scott

I. Introduction

“It is not easy to build brands in today’s environment. The brand builder who attempts to develop a strong brand is like a golfer playing on a course with heavy roughs, deep sandtraps, sharp doglegs, and vast water barriers. It is difficult to score well in such conditions.”1 Beyond the inherent difficulties of brand-building such as creating a coherent brand strategy, competing on price, and the need to invest resources in the core business, the ever-increasing role of the Internet brings additional hurdles.

This article addresses areas of difficulty and contention in branding on the Internet. Beginning with earlier consequences of Internet marketing, including the creation of the Internet Corporation for Assigned Names and Numbers (“ICANN”) and the Anticybersquatting Consumer Protection Act (“ACPA”), to more recent developments, such as pop-up and keyword advertising, screenscraping, contributory infringement, and virtual worlds, this article sets forth the jurisprudence surrounding disputes occurring along each of these frontiers. In part because the law in each of these areas has been built upon principles developed in an immediately preceding area, and in part because the technological advances in one area rely on those that came before, these developments are treated in rough chronological order. Throughout, the law on Internet branding continues to develop and, even along the most heavily litigated fronts, remains somewhat unsettled relative to other areas of intellectual property law.

A. ICANN Dispute Resolution and the Anticybersquatting Consumer Protection Act

The rise of the Internet in the 1990s brought with it a new challenge to brand owners—cybersquatting. In its most typical form, cybersquatting has involved the registration of domain names incorporating well-known trademarks and brand names, with the hope of selling them to the rightful owner at exorbitant prices. Until 1999, brand owners’ options were limited in pursuing such domain-name pirates. Most often, they were forced to litigate using the relatively ill-fitting doctrines of trademark infringement and dilution. Although courts generally were sympathetic to brand-owner plaintiffs in such actions, existing trademark law generally was not well-equipped to combat cybersquatting.2 In response, ICANN established a dispute resolution policy that virtually all domain registrars have since adopted,3 and Congress passed the ACPA.4

Thus, in addition to the earlier established doctrines of infringement, unfair competition, and dilution, trademark owners today routinely employ two further regimes to counteract cybersquatting

1 DaviD a. aaker, BuilDing Strong BranDS 26 (1996).2 See, e.g., Christopher R. Perry, Trademarks as Commodities: The “Famous” Roadblock to Applying Trademark Dilution in Cyberspace,

32 Conn. l. rev. 1127 (2000). 3 See ICANN, Uniform Domain Name Dispute Resolution Policy, available at http://www.icann.org/en/dndr/udrp.htm (“UDRP”) (“All

registrars in the .biz, .com, .info, .name, .net, and .org top-level domains follow the Uniform Domain-Name Dispute-Resolution Policy.”) (last visited Feb. 25, 2009).

4 15 U.S.C. § 1125(d) (2006).

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and its potentially deleterious effect on their brands. Both ICANN dispute resolution and the ACPA have their own advantages and limitations, which have been extensively detailed and discussed elsewhere.5 What follows briefly summarizes the current state of the law with respect to each mechanism, highlighting, where possible, further resources for the interested reader.

1. ICANN Dispute Resolution Services

ICANN is a non-profit, private-sector corporation created in 1998 by the U.S. Department of Commerce to preserve the operational stability of the Internet. It specifically coordinates the assignment of domain names, IP address numbers, protocol parameters, and port numbers.

To address cybersquatting, ICANN promulgated a Uniform Domain Name Dispute Resolution Policy (“UDRP”)6 and the Rules for Uniform Domain Name Dispute Resolution Policy (“Rules”).7 ICANN approves dispute-resolution service providers (“DRSP”) who conduct the administrative proceedings involving domain name disputes. These service providers are bound to conduct the administrative proceedings in accordance with the UDRP and the Rules.

The UDRP operates between the registrars and the holder of the domain name registration; all holders of domain name registrations take these names subject to the terms of the UDRP.8 The UDRP requires all holders to submit to a mandatory administrative proceeding if a third party complainant asserts that the domain name was wrongfully obtained. To prevail in the action, the complainant must establish: (a) identical or confusing similarity; (b) the respondent has no legitimate interests in the domain name at issue; and (c) the respondent registered and is using the domain name in bad faith.9

a) Identical or Confusing Similarity

To have a domain name transferred pursuant to ICANN’s UDRP, a complainant first must show that the respondent’s domain name is “identical or confusingly similar” to the complainant’s trademark or service mark.10 The UDRP does not require the complainant to have a registered mark. Moreover, although the UDRP specifically mentions trademarks and service marks, and not other intangible rights, some panel decisions have effectively allowed publicity rights to be asserted.11

5 See, e.g., Elizabeth M. Flanagan, No Free Parking: Obtaining Relief from Trademark-Infringing Domain Name Parking, 98 traDemark rep. 1160 (2008); Alyson B. Danowski, Defending Your Client’s Domain Name, 14 intell. prop. StrategiSt 3 (Sept. 2008).

6 ICANN UDRP, supra note 3.7 ICANN, Rules for Uniform Domain Name Dispute Resolution Policy (Oct. 24, 1999), http.//www.icann.org/dndr/udrp/uniform-rules.htm

(“ICANN Rules”).8 The UDRP states that by applying for a domain name registration, the applicant represents that, to the best of the applicant’s knowledge, its

domain name does not “infringe upon or otherwise violate the rights of any third party.” The UDRP further states the three circumstances when the registrar will cancel or transfer a domain name registration: (1) if the owner consents; (2) if a court orders such a transfer; or (3) if an administrative panel of an approved DRSP decides such a transfer is warranted. See id. ¶ 3.

9 Id. 10 Id. ¶ 4 (a)(i).11 See Scarlett Johansson v. Tristan Dare, WIPO Case No. D2008-1650 (Dec. 16, 2008) (granting transfer of scarlettjohansson.com); Nick

Cannon v. Modern Limited – Cayman Web Development, WIPO Case No. D2005-0575 (Aug. 23, 2005) (granting transfer of nickcannon.com); Kidman v. Zuccarini, WIPO Case No. D2000-1415 (Jan. 23, 2001) (granting transfer of nicolekidman.com and nicolekidmannude.com); Julia Fiona Roberts v. Russell Boyd, WIPO Case No. D2000-210 (May 29, 2000) (granting transfer of juliaroberts.com). In many of these cases, the panel found that the complainant’s name functioned as a “common law” mark. WIPO case decisions are available at http://www.wipo.int/amc/en/domains/search.

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Because most published opinions have involved very similar names, the “identical or confusingly similar” element has not generated much controversy. In Gateway, Inc. v. James Cadieux, for example, the respondent registered <pcgateway.com> and <pcgateway.net>, which were found confusingly similar to complainant’s registered marks.12 In determining confusing similarity, the DRSP panel typically does not analyze the traditional likelihood of confusion factors such as the similarity of goods and services or channels of trade.13 Rather, the marks are assessed alone, without market context.

On occasion, however, complainants fail to establish confusing similarity, especially when the complainant’s mark is weak or when the third-party uses of the mark are prevalent. For example, in Reed Publishing v. Select Gourmet Foods Inc., the panel found the respondent’s domain registration for <whoiswhoinlaw.com> and <whoiswhoinpolitics.com> not confusingly similar to complainant’s WHO’S WHO IN AMERICAN LAW and WHO’S WHO IN AMERICAN POLITICS trademarks.14 Among other reasons, respondent successfully demonstrated numerous third-party uses of the “who’s who” motif without geographical limitations.

b) Respondent Has no Legitimate Interest in the Domain Name

In addition to confusing similarity, the UDRP requires a complainant to establish that the respondent has “no rights or legitimate interests in respect of the domain name.”15 A complainant may discharge this burden by stating the reason “why [the respondent] should be considered as having no rights or legitimate interests” in the domain name.16 If the complainant has a federally registered trademark, nationwide constructive notice can be asserted to demonstrate the respondent’s lack of legitimate rights or interests in the domain name.17

If the complainant provides a credible reason why the respondent has no legitimate interests, the burden generally shifts to the respondent to demonstrate some legitimate interest. For example, in Nandos International Limited v. M Fareed Farukhi,18 the complainant stated that it filed a U.S. trademark application for the mark NANDO’S at least five years before the respondent registered the domain names <nando.com> and <nandoschicken.com>, but the respondent failed to submit evidence of interest in the name. Accordingly, the panel concluded the respondent lacked a legitimate interest in the domain name.19

12 WIPO Case No. D2000-0198 (May 25, 2000).13 See, e.g., Fed. Cartridge Co. v. Madmouse Commc’ns, WIPO Case No. D2001–0756 (July 24, 2001).14 CPR File No. CPR004 (Aug. 29, 2000).15 See ICANN UDRP, supra note 3, ¶ 4(a)(ii). 16 See ICANN Rules, supra note 7, ¶ 3(b)(ix)(2). 17 See Cyberbingo Corp. v. 207 Media Inc., WIPO Case NO. D2005-0714 (Oct. 4, 2005) (“Actual or constructive knowledge of Complainant’s

CYBERBINGO trademark registration, prior to registration of the confusingly similar domain name in dispute, undermines any claim to legitimacy.”); Sunfest v. Elec. Sys. Tech., Inc., WIPO Case No. D2000-0631 (Oct. 3, 2000); J. Crew Int’l v. crew.com, WIPO Case No. D2000-0054 (Apr. 20, 2000).

18 WIPO Case No. D2000-0225 (May 23, 2000). See also Wal-Mart Stores, Inc. v. Walmarket Canada, WIPO Case No. D2000-0150 (May 2, 2000).

19 WIPO Case No. D2000-0225.

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In view of this shifting burden, the UDRP provides guidance to respondents seeking to demonstrate legitimacy by setting forth three indicia of legitimate interests.20 Establishing one of these indicia effectively will prevent a complainant from establishing the second prong—“lack of legitimate interests”—and allows a respondent to maintain it lacked bad faith (the third prong), discussed infra. The three indicia of legitimate interest in the domain name are:

(1) before any notice to [the holder] of the dispute, [the holder’s] use of, or demonstrable preparations to use, the domain name or a name corresponding to the domain name in connection with a bona fide offering of goods or services; or

(2) [the holder] (as an individual, business, or other organization) [has] been commonly known by the domain name, even if [the holder has] acquired no trademark or service mark rights; or

(3) [the holder is] making a legitimate noncommercial or fair use of the domain name, without intent for commercial gain to misleadingly divert consumers or to tarnish the trademark or service mark at issue.21

First, if the respondent can show it was selling goods bearing the mark before it knew of the dispute, then a legitimate right generally is established. Similarly, if the respondent has adopted a generic term describing the goods he sells, then a panel is more apt to find legitimate rights. For instance, in Eauto, LLC v. Triple S. Auto Parts, the respondent had been selling auto lamps and decided to market them on the web.22 The panel decided that “eautolamps” was an example of an Internet-based description of a generic product because “the letter ‘e’ preceding [a product] has come to be understood as an electronic, Internet-based form of the same.”23 Thus the panel held for the respondent. However, merely using the domain name to link to other sites does not constitute a bona fide offering of goods or services.24

The second indicator of a “legitimate interest” provides protection to respondents who register domains for their commonly known names, even if they have not acquired trademark rights in the names.25 This clause protects a company that does not use its name in conjunction with goods or services, but nevertheless registers the company name as part of a domain name. An effort to register a common name in such circumstances negates the intent to pirate the rights of others, which is the narrow target of the ICANN system.26

20 See ICANN UDRP, supra note 3, ¶ 4(c).21 See id.22 WIPO Case No. D2000-0047 (Mar. 24, 2000). 23 Id. at 5. 24 See Pardes Inst. of Jewish Studies v. Hans Schultz LLC, WIPO Case No. D2008-0648 (July 3, 2008) (citing cases); Sunfest, WIPO Case

No. D2000-0631; Easy Jet Airline Co. v. Steggles, WIPO Case No. D2000-0024 (Mar. 17, 2000).25 ICANN UDRP, supra note 3, ¶ 4 (c)(ii); see Ken’s Foods Inc. v. kens.com, WIPO Case No. D2005-0721 (Sept. 11, 2005) (refusing to

transfer kens.com, the domain name at which respondent, whose given name was “Ken,” operated a weblog).26 See ICANN, Domain Name Dispute Resolution Policies, http://www.icann.org/udrp/ (last visited Mar. 25, 2009) (describing the purpose

of the ICANN system as preventing “abusive” registrations).

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Third, the UDRP protects legitimate non-commercial or fair use of the domain name so long as customers are not diverted or trademark rights are not tarnished for commercial gain.27 This defense is commonly invoked, but is rarely successful, especially if the respondent sells goods in addition to criticizing the trademark owner. In Monty and Pat Roberts, Inc. v. Bill Keith,28 for example, the panel rejected respondent’s free-speech assertion, stating “[t]he fact that Respondent’s primary motive for establishing its site may be to criticize Complainant does not insulate Respondent from the fact that it is directly and indirectly offering products for sale . . . .”29

c) Bad Faith

Even if a complainant shows that the respondent holds a domain name that is confusingly similar to the complainant’s trademark and that the respondent has no legitimate rights or interests in the mark, the complainant still must establish that the respondent has registered and is using the domain name in “bad faith.”30

The “use” requirement has caused concern for complainants because the UDRP does not clearly define this term and many cybersquatters do not actively use the domain names they have registered. In general, if the domain name registered by respondent has any display, or if the domain name owner makes any attempt to sell the name at a profit, then the use requirement probably will be met.31 Absent such activity, a panel may find the use requirement lacking.32 However, if the trademark at issue is particularly strong and well-known, a distinct possibility exists that a panelist will overlook the use requirement and order the transfer of the name.33

Assuming the use requirement is met, a complainant still must demonstrate respondent’s bad faith.34 The UDRP provides four specific circumstances that satisfy this element:

(i) circumstances indicating that [the holder has] registered or [has] acquired the domain name primarily for the purpose of selling, renting or otherwise transferring the domain name registration to the complainant who is the owner of the trademark or service mark or

27 See ICANN UDRP, supra note 3, ¶ 4 (c)(iii).28 WIPO Case No. D2000-0299 (June 9, 2000).29 Id. at 10. Compare Sermo, Inc. v. CatalystMD, LLC, WIPO Case No. D2008-0647 (July 2, 2008) (refusing to transfer domain name

because respondent had a legitimate interest in using the domain name sermosucks.com in connection with a criticism site which he operated without any intent for commercial gain).

30 ICANN UDRP, supra note 3, ¶ 4 (a)(iii).31 See, e.g., World Wrestling Fed’n, Inc. v. Bosman, WIPO Case No. D1999-0001 (Jan. 4, 2000) (holding that the offer to sell the domain

name registration to the complainant for a profit was a sufficient “use” of the domain name to satisfy the UDRP).32 See, e.g., Cyro Indus. v. Contemporary Design, WIPO Case No. D2000-0336 (June 19, 2000) (holding that because respondent never

posted a web site at the domain name <acrylite.com> and never contacted the complainant, it did not use the domain name as the UDRP requires); Sporoptic Pouilloux S.A. v. William H. Wilson, WIPO Case No. D2000-0265 (June 16, 2000) (refusing to transfer domain name because no evidence indicated respondent did anything other than register the domain name in bad faith).

33 Telstra Corp. Ltd. v. Nuclear Marshmallows, WIPO Case No. D2000-0003 (Feb. 18, 2000) (because the complainant’s trademark was strong and the respondent attempted to conceal its identity, the panel reasoned that respondent’s activities were inconsistent with a good faith use of the domain name); see also Société pour l’Oeuvre et la Mémoire d’Antoine de Saint Exupéry – Succession Saint Exupéry – D’Agay v. Perlegos Properties, WIPO Case No. D2005-1085 (Jan. 2, 2006) (transferring thelittleprince.com despite the fact that respondent was not making use of the website).

34 ICANN UDRP, supra note 3, ¶ 4 (a)(iii).

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to a competitor of that complainant, for valuable consideration in excess of [the holder’s] out-of-pocket costs directly related to the domain name; or

(ii) [the holder has] registered the domain name in order to prevent the owner of the trademark or service mark from reflecting the mark in a corresponding domain name, provided that [the holder has] engaged in a pattern of such conduct; or

(iii) [the holder has] registered the domain name primarily for the purpose of disrupting the business of a competitor; or

(iv) by using the domain name, [the holder has] intentionally attempted to attract, for commercial gain, Internet users to [its] website or other online location, by creating a likelihood of confusion with the complainant’s mark as to the source, sponsorship, affiliation, or endorsement of [the holder’s] website or location or of a product or service on [the holder’s] website or location.35

Numerous panel decisions explain and apply each of these bad faith indicia. They are briefly addressed here.

i) Primary Purpose to Sell the Name

Panels generally have adopted a rather low threshold for establishing a primary intent to sell the name to a trademark owner or a competitor. This is likely due in part to the reality that if the complainant has shown that the domain name is confusingly similar to its trademark, and that the respondent has no legitimate interests in the name, then “bad faith” can be inferred. For example, in Home Interiors & Gifts, Inc. v. Home Interiors, the panel found that the posting of a counter displaying web page hits at the websites <homeinteriors.net> and <homeinteriorsandgifts.com> was enough to show an intent to sell, because the counter illustrated the number of diverted web users, and thus supported the cybersquatter’s price.36 Likewise, Educational Testing Service v. TOEFL concluded that proof of a general intent to sell the website <toefl.com> to any buyer, as contrasted with an intent to sell the domain name to the trademark owner or its competitor, was sufficient to show bad faith.37

ii) Pattern of Bad Faith Registration

A pattern of infringing registrations also supports a finding of bad faith.38 This indicator is aimed at the stereotypical cybersquatter who has registered numerous domain names incorporating well-known trademarks. While an obvious cybersquatter may have hundreds of registrations, the more difficult question arises when a respondent has registered only a few suspect domain names. Panels have been inconsistent concerning how many suspicious registrations are sufficient to constitute bad

35 Id. ¶ (4)(b). The UDRP sets forth the elements out in second person, addressing the registrants of domain names more directly in an apparent effort to give clear notice that their registrations are subject to the terms of the UDRP.

36 WIPO Case No. D2000-0010 (Mar. 7, 2000). 37 WIPO Case No. D2000-0044 (Mar. 16, 2000). 38 ICANN UDRP, supra note 3, ¶ 4(b)(ii).

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faith: one case found two or three insufficient;39 another found three to be enough.40 While no magic number exists, if a respondent has substantially more than three dubious registrations, a pattern is likely to be found, especially if the registrations contain well-known trademarks.

iii) Registration Primarily to Disrupt a Competitor’s Business

Panels have had little difficulty finding bad faith when a respondent has registered a mark primarily to deny a competitor use of a mark on the Internet.41 In Georgia Gulf Corp. v. The Ross Group, for instance, respondent had registered domain names nearly identical to its competitors’ trade names.42 The respondent’s website simply displayed a notice that the registered site had been reserved and gave contact information.43 After being served with a complaint, the respondent e-mailed the complainant and offered to sell the site for $36,000.44 The panel concluded that respondent “registered the domain name to prevent complainant from reflecting the mark in a corresponding domain name and . . . primarily for the purpose of disrupting the business of a competitor.”45

iv) Creating Confusion for Commercial Gain

Finally, bad faith generally will be found when a respondent creates confusion between the domain name and another’s trademark to attract users to its website. For example, in British Broadcasting Corp. v. Renteria, the respondent, an individual in Caracas, Venezuela, registered the domain names <bbcdelondres.com>, <bbcenespanol.com>, <bbcenespanol.net>, and <bbcenespanol.org>.46 At one of these sites, the respondent used the BBC’s logo, framed the content of its website, and described itself as being a “world leader in news” offering “up to date, accurate and independent information 24 hours a day.”47 The panel concluded such conduct constituted an intentional attempt to lure web users for commercial gain by creating confusion as to source, sponsorship, or affiliation.48

In sum, under the ICANN UDRP, domain names are transferred when the domain name is identical or confusingly similar to another’s trademark or service mark, the domain-name registrant has no legitimate interests in the domain, and the registrant acted in bad faith. Good faith domain name registrations that result in likelihood of confusion or trademark dilution should not be transferred in an ICANN proceeding. In this way, the ICANN dispute resolution system is not an alternative vehicle for vindicating trademark rights. In practice, much turns on what kind of proof is available to establish “bad faith.” Because no effective discovery mechanism exists, a complainant often

39 Ingersoll-Rand Co. v. Gully, WIPO Case No. D2000-0021 (Mar. 9, 2000). But see Vitro S.A. de C.V., v. ICG, WIPO Case No. D2005-1150 (Dec. 26, 2005) (stating that while generally, two dubious registrations was insufficient to show a pattern for bad faith purposes, such a strict conception was not required where respondent was complainant’s former employee and the two domain names he registered were the two most obvious domain names for complainant).

40 Bellevue Square Managers, WIPO Case No. D2000-0056.41 ICANN UDRP, supra note 3, ¶ 4(b)(iii).42 WIPO Case No. D2000-0218 (June 14, 2000).43 Id.44 Id.45 Id. at 3. 46 WIPO Case No. D2000-0050 (Mar. 23, 2000). 47 Id. at 4. 48 Id. at 6.

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will have to demonstrate bad faith with publicly available information or proof of extortionary communications made by the respondent.

Finally, participants in ICANN proceedings should know that an ICANN decision is not the “final word.” Participants dissatisfied with an ICANN result can suspend the transfer of a contested domain name by filing a federal district court action and providing notice to the domain name registrar within ten days of the adverse ICANN ruling.49 Thus, the only real effect of an ICANN proceeding is to transfer possession of a domain name, as participants’ legal rights are not affected by the outcome. Few bad faith cybersquatters, however, will likely file a lawsuit to recapture registrations due to the scrutiny they are likely to be subjected to and the prohibitive costs of litigation.

2. The Anticybersquatting Consumer Protection Act

For brand owners seeking greater legal force than is available under the ICANN UDRP for ill-gotten domain names that threaten a strong mark or brand, the ACPA was enacted in 1999 as an addition to the Lanham Act.50 Like other Lanham Act claims, a plaintiff may seek injunctive relief, an accounting of defendant’s profits, actual damages, costs, and attorneys’ fees.51 In the alternative, the ACPA provides that a “plaintiff may elect, at any time before final judgment is rendered by the trial court, to recover, instead of actual damages and profits, an award of statutory damages in the amount of not less than $1,000 and not more than $100,000 per domain name, as the court considers just.”52 The availability of statutory damages can be used to incentivize settlement or to envision summary judgment as a plaintiff’s end-game.

To prevail on the merits under the ACPA, the plaintiff must show that: (1) its mark is distinctive or famous; (2) the defendant’s domain name is “identical or confusingly similar” to plaintiff’s mark, or dilutive of its famous mark; and (3) the defendant acted with a bad faith intent to profit from plaintiff’s mark.53 One difference between these elements and the elements under the ICANN UDRP is that the ACPA prohibits domain names that are “dilutive” of a famous mark. The term “dilutive” broadens the field of potentially infringing domain names to include not only confusingly similar names, but also those that weaken the selling power of the famous mark.54 At least one appellate court specifically has adopted the criteria for determining fame set forth in the Federal Trademark Dilution Act.55

The protection against trademark dilution in this context may encompass “[trademark] sucks” registrations, which have not consistently been deemed confusingly similar. In Lucent Technologies,

49 See ICANN UDRP, supra note 3, ¶ 4(k) (“If an Administrative Panel decides that [respondent] domain name registration should be canceled or transferred, we will wait ten (10) business days (as observed in the location of our principal office) after we are informed by the applicable Provider of the Administrative Panel’s decision before implementing that decision.”).

50 See 15 U.S.C. § 1125(d) (2006).51 See Id. §§ 1114, 1116–1117 (2006).52 Id. at § 1117.53 See Sporty’s Farm L.L.C. v. Sportsman’s Market, Inc., 202 F.3d 489, 497 (2d Cir. 2000); Globalsantafe Corp. v. Globalsantafe.com, 250

F. Supp. 2d 610, 616 (E.D. Vir. 2003). 54 Compare with ICANN UDRP, supra note 3, ¶ 4(a)(i) (noting that the standard is “identical or confusingly similar to a trademark or service

mark in which the complainant has rights”). 55 Sporty’s Farm, 202 F.3d at 497.

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Inc. v. Johnson, the plaintiff stated a claim under the ACPA where the defendant’s <lucentsucks.com> domain allegedly displayed pornography.56 The court determined that such an association could “corrode[] the positive associations of the plaintiff’s mark, thereby reducing the mark’s value,” which is actionable under a dilution theory.57

Another facial difference between the ACPA and the ICANN UDRP is the former’s explicit inclusion of rights of publicity.58 The statute includes an individual’s name, whereas the UDRP only includes trademarks and service marks.59 While several ICANN decisions have transferred domain names based on rights of publicity, a panel could read the language of the UDRP more narrowly.

Like the ICANN dispute resolution system, the central issue under the ACPA is the defendant’s bad faith. The ACPA sets forth a list of factors the courts may consider in determining whether a registration is actionable:

(1) the trademark or other intellectual property rights of the person, if any, in the domain name;

(2) the extent to which the domain name consists of the legal name of the person or a name that is otherwise commonly used to identify that person;

(3) the person’s prior use, if any, of the domain name in connection with the bona fide of-fering of any goods or services;

(4) the person’s bona fide noncommercial or fair use of the mark in a site accessible under the domain name;

(5) the person’s intent to divert consumers from the mark owner’s online location to a site accessible under the domain name that could harm the goodwill represented by the mark, either for commercial gain or with the intent to tarnish or disparage the mark, by creating a likelihood of confusion as to the source, sponsorship, affiliation, or endorse-ment of the site;

(6) the person’s offer to transfer, sell, or otherwise assign the domain name to the mark owner or any third party for financial gain without having used, or having an intent to use, the domain name in the bona fide offering of any goods or services, or the person’s prior conduct, indicating a pattern of such conduct;

(7) the person’s provision of material and misleading false contact information when ap-plying for the registration of the domain name, the person’s intentional failure to main-tain accurate contact information, or the person’s prior conduct indicating a pattern of such conduct;

(8) the person’s registration or acquisition of multiple domain names which the person knows are identical or confusingly similar to marks of others that are distinctive at the time of registration of such domain names, or dilutive of famous marks of others

56 56 U.S.P.Q. 2d 1637 (C.D. Cal. 2000). But see Lucent Techs., Inc. v. Lucentsucks.com, 95 F. Supp. 2d 528, 535 (E.D. Va. 2000) (suggesting that use of “sucks” in domain name would not, in and of itself, be actionable).

57 Lucent Tech., Inc. v. Johnson, 57 U.S.P.Q.2d at 1639. 58 15 U.S.C. § 1125(d)(1)(A) (2000) (“[A] person shall be liable in a civil action by the owner of a mark, including a personal name which

is protected as a mark under this section”).59 ICANN UDRP, supra note 3, ¶ 4(a)(i) (stating that respondent’s “domain name is identical or confusingly similar to a trademark or

service mark in which the complainant has rights”) (emphasis added).

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that are famous at the time of registration of such domain names, without regard to the goods or services of the parties; and

(9) the extent to which the mark incorporated in the person’s domain name registration is or is not distinctive and famous within the meaning of the [list of factors for determin-ing fame under § 43(c)(1) of the Lanham Act].60

While these factors are similar to the bad faith factors found in the ICANN system, two important differences exist. The most significant is the absence of any requirement that the domain name registrant actually use the domain name. As discussed above, the ICANN UDRP states that the complainant must show that the registration “has been registered and is being used in bad faith.”61 By contrast, the ACPA imposes liability on any person who “registers, traffics in, or uses a domain name” in bad faith.62 Because many cybersquatters register hundreds of names and never use them, the ACPA’s broad reach is a truly significant feature.

Courts generally apply the bad faith factors listed in the statute,63 but they also have considered other factors, as the ACPA clearly contemplates. In Sporty’s Farm L.L.C. v. Sportsman’s Market, Inc., for example, the court found bad faith even when the counterclaim defendant, owner of the <sportys.com> domain name, did not seek to sell the domain name back to the trademark owners.64 The court analyzed all nine factors, but was most moved by the “unique circumstances” of the case, which included evidence that the defendant’s parent corporation knew of the plaintiff’s SPORTY’S trademark for aviation goods and services at the time of registration, and was planning to go into direct competition with it in these markets.65 The court determined that the defendant registered “for the primary purpose of keeping Sportsman’s from using that domain name.”66

In Shields v. Zuccarini, the plaintiff operated a popular website at <www.joecartoon.com>, which featured plaintiff’s humorous animations.67 The defendant registered the domains <joescartoon.com>, <joecarton.com>, <joescartons.com>, and <cartoonjoe.com>, which featured advertisements for other sites and credit card companies.68 Visitors who accidentally misspelled the Joe Cartoon web address were “mousetrapped” in the defendant’s site, prevented from easily exiting by a succession of ads which came up on the screen.69

60 15 U.S.C. § 1125(d)(1)(B)(i) (2006). The ACPA further states: “Bad faith intent described under subparagraph (A) shall not be found in any case in which the court determines that the person believed and had reasonable grounds to believe that the use of the domain name was a fair use or otherwise lawful.” Id. § 1125(d)(1)(B)(ii). At lease one court of appeals has held that the usual preponderance of the evidence standard applies to claims of bad faith under this section of the Lanham Act. See Harrods Ltd. v. Sixty Internet Domain Names, 302 F.3d 214, 227 (4th Cir. 2002).

61 See ICANN UDRP, supra note 3, ¶ 4(a)(iii) (emphasis added). 62 15 U.S.C. § 1125(d)(1)(A)(ii) (2006) (emphasis added).63 See Northland Ins. Cos. v. Blaylock, 115 F. Supp. 2d 1108, 1124 n.8 (D. Minn. 2000).64 202 F.3d 489 (2d Cir. 2000).65 Id. at 499.66 Id. 67 89 F. Supp. 2d 634 (E.D. Pa. 2000), aff’d, 254 F.3d 476 (3d Cir. 2001). On appeal, the Third Circuit rejected defendants’ argument that

the ACPA was not meant to prevent intentional misspellings, also known as “typosquatting.” Id. at 483.68 Shields, 89 F. Supp 2d at 635.69 Id.

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The court easily concluded that the defendant registered with the required bad faith: he had no bona fide intellectual property rights to the name, the name was not his personal name, and he admitted in court that he registered thousands of names, and their misspellings, in an effort to divert Internet traffic to his sites.70 Ultimately, Shields awarded the plaintiff $50,000 in statutory damages ($10,000 per infringing domain name), attorneys’ fees of $35,798.50, and costs of $3,310.96.71

Shields illustrates well the advantages of pursuing cybersquatters under the ACPA, which makes available not only statutory damages (potentially providing a means of lower litigation costs) or profits and actual damages (providing for potentially larger damages amounts), but also attorneys’ fees and costs. Since professional cybersquatting defendants often have hundreds or thousands of illegitimate domain names, simply losing several of them in a court ordered transfer does not seriously affect their operations. Cases like Shields properly compensate plaintiffs and serve as a deterrent to future piracy.72 Thus, for plaintiffs willing to undertake the expense of litigation—as opposed to the generally less expensive alternative of dispute resolution under the ICANN UDRP—asserting claims pursuant to the ACPA may be the preferred means of establishing proper domain name ownership.

B. Pop-up Ads

Even after a brand owner thoroughly establishes its ownership of domain names associated with its trademarks, service marks, and trade names, branding on the Internet presents additional challenges, such as potential infringement or dilution from others’ uses of pop-up advertisements and search engine keyword terms. These new challenges owe their existence to the more interactive nature of branding on the Internet.

In contrast to the traditional advertising model, the Web is all about experiences. In the Web environment, the role of the audience is an active one; the lean-forward rather than the lean-back attitude changes everything. The audience member usually has a functional goal in mind—seeking information, entertainment, or transactions—and ignores or treats as an annoyance anything that gets in the way . . . .73

In many ways, pop-up advertising epitomizes both the “lean-forward” approach of Internet marketing and the potential disregard consumers show for annoying or superfluous information.74

70 Id. at 640.71 Shields v. Zuccarini, No. Civ.A. 00-494, 2000 WL 1053884 (E.D. Pa. July 18, 2000).72 Courts interpreting the ACPA have evidenced a willingness to impose significant statutory damages awards. In Electric Boutique Holdings

Corp. v. Zuccarini, 56 U.S.P.Q.2d 1705 (E.D. Pa. 2000), aff’d, 33 F. App’x 647 (3d Cir. 2002), the court awarded the plaintiff $500,000 in statutory damages, $100,000 for each of the five infringing domain names registered by defendant Zuccarini. See also Pinehurst, Inc. v. Wick, 256 F. Supp. 2d 424 (M.D.N.C. 2003) (awarding trademark holder $100,000 in statutory damages).

73 DaviD a. aaker & eriCh JoaChimSthaler, BranD leaDerShip 233 (1999).74 “A ‘pop-up’ ad appears on a computer screen to obscure and cover most of the information on the screen.” 4 J. thomaS mCCarthy,

mCCarthy on traDemarkS anD unfair Competition § 25:70.75 (4th ed. 2009). Using similar technology, but generally causing slightly less irritation, a “pop-under” ad “opens a new browser window hidden under the active window.” See http://en.wikipedia.org/wiki/Pop-up_advertising (last visited on Mar. 26, 2009).

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By “popping-up” in response to consumers’ own Internet searches,75 pop-up ads have provided advertisers with the ability to target and engage potential customers based on consumers’ own behavior. The irritation often caused by pop-up ads, however, has given rise to a veritable cottage industry aimed at suppressing this medium.

Pop-ups became popular after the original form of Internet advertising, the banner ad, proved less effective than advertisers had hoped.76 In particular, the “click through rate” of banners caused many advertisers to believe that the Internet would never become a viable marketing medium. As a result, Internet advertising revenues began to diminish until around 2002, when pop-up ads began to become extremely popular. From that time until 2004, when Microsoft released Service Pack 2 for Windows XP—aimed at suppressing most pop-ups—pop-up advertising enjoyed what may have been its zenith.77

Around the time pop-up advertising began encountering technological obstacles, it started facing new legal challenges as well. In 2003, several companies brought suit against a pop-up advertiser, WhenU.com, Inc.78 The trademark infringement claims asserted in these lawsuits alleged that the pop-up ads disseminated by WhenU.com confused Internet users into believing that the pop-up ads were approved by, or associated with, the website triggering the pop-up ad.79

The district courts for the Eastern District of Virginia and Eastern District of Michigan held that WhenU.com had not violated the Lanham Act because it had not “used” the respective plaintiffs’ trademarks within the Act’s definition of “use in commerce.”80 U-Haul’s claims against WhenU.com in Virginia were dismissed on summary judgment because “(1) WhenU’s pop-up window is separate and distinct from U-Haul’s Web site, (2) WhenU does not advertise or promote U-Haul’s trademarks . . . , and (3) [WhenU’s] SaveNow program does not hinder or impede Internet users from accessing U-Haul’s Web site in such a manner that WhenU ‘uses’ U-Haul’s trademarks.”81 Similarly, the Eastern District of Michigan refused to grant Wells Fargo the preliminary injunction it sought against WhenU.com because Wells Fargo’s “marks are neither displayed or appear to be displayed on WhenU’s windows, and the fact that WhenU advertisements appear on a computer

75 Pop-up ad programs take different forms but often are “bundled” with other free software programs and saved onto a consumer’s computer when the consumer downloads the other free software, such as a free screensaver program. Once downloaded, the pop-ad program “scan[s] the user’s Internet activity . . . . to deliver[] pop-up ads matched to the user’s perceived interests.” mCCarthy, supra note 74, § 25:70.75.

76 See http://en.wikipedia.org/wiki/Pop-up_advertising (last visited on Mar. 26, 2009).77 “Advertisers continually seek ways to circumvent such restrictions. For example, some pop-up ads are generated using Adobe Flash. Since

pop-up blockers only blocked the JavaScript method, the Flash method would bypass the pop-up blocker.” Id. 78 mCCarthy, supra note 74, § 25:70.75 (citing U-Haul Int’l, Inc. v. WhenU.com, Inc., 279 F. Supp. 2d 723 (E.D. Va. 2003); 1-800 Contacts,

Inc. v. WhenU.com, Inc., 309 F. Supp. 2d 467 (S.D.N.Y. 2003); and Wells Fargo & Co. v. WhenU.com, Inc., 293 F. Supp. 2d 734 (E.D. Mich. 2003)).

79 Id. 80 Section 45 of the Lanham Act defines “use in commerce” with respect to goods, inter alia, as “plac[ing] in any manner [a mark] on the

goods or their containers or the displays associated therewith or . . . on documents associated with the goods or their sale; it defines “use in commerce” with respect to services as “us[ing] or display[ing the mark] in the sale or advertising of services and the services are rendered in commerce . . . .” 15 U.S.C. § 1127 (2006).

81 U-Haul Int’l, Inc., 279 F. Supp. 2d at 729.

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screen at the same time [that Wells Fargo’s] web pages are visible in a separate window does not constitute a use in commerce of [Wells Fargo’s] mark.82”

Contrary to these decisions, the District Court for the Southern District of New York granted 1-800 Contacts a preliminary injunction against WhenU.com for WhenU’s pop-up ads for Vision Direct, which appeared when an Internet user accessed 1-800 Contacts’ website.83 Because WhenU caused Vision Direct’s pop-up ad to appear when a person entered 1-800 Contacts’ URL, the court found that WhenU “used in commerce” 1-800 Contacts’ trademark to cause both initial-interest and actual confusion.84 Accordingly, the court preliminarily barred WhenU from using 1-800 Contacts’ web address in the SaveNow program that triggered the Vision Direct pop-up ads.85

The Second Circuit, however, reversed.86 Focusing on “[t]he fact . . . that WhenU does not reproduce or display 1-800’s trademarks at all . . . [or] cause the trademarks to be displayed to a [computer]-user,” the Second Circuit found that the “fatal flaw with [the district court’s] holding is that WhenU’s pop-up ads do not display the 1-800 trademark” and thus cannot constitute a “use in commerce.”87 Expounding on the absence of “display,” the court opined:

A company’s internal utilization of a trademark in a way that does not communicate it to the public is analogous to an individual’s private thoughts about a trademark. Such conduct simply does not violate the Lanham Act, which is concerned with the use of trademarks in connection with the sale of goods or services in a manner likely to lead to consumer confusion as to the source of such goods or services.88

Because WhenU merely used 1-800 Contacts’ website—not its trademark—in WhenU’s SaveNow directory, which was not visible to the public or consumers, to trigger advertisements which popped up in a separate window that was prominently branded with WhenU’s and Vision Direct’s own trademarks, the Second Circuit held that no “use in commerce” occurred.89 From a practical standpoint, the Second Circuit found it “noteworthy” that before filing this lawsuit, 1-800 Contacts “entered into agreements with WhenU competitors Gator and Yahoo! to have its own pop-up and banner ads delivered to [computer]-users in response to the [computer]-user’s input of particular website addresses and keywords that were specified by 1-800.”90 The court harkened back to traditional marketing principles, whereby vendors routinely “seek specific ‘product placement’ in retail stores precisely to capitalize on their competitors’ name recognition”—such as a drug store

82 Wells Fargo & Co., 293 F. Supp. 2d 761.83 1-800 Contacts, Inc., 309 F. Supp. 2d at 480. 84 As an additional basis for finding “use in commerce,” the district court concluded that WhenU’s inclusion of Plaintiff’s Web site

<www.1800contacts.com>, which incorporates the 1-800 CONTACTS trademark, “in the proprietary WhenU.com directory of terms that triggers pop-up advertisements on SaveNow users’ computers . . . WhenU.com ‘uses’ Plaintiff’s mark . . . to advertise and publicize companies that are in direct competition with Plaintiff.” Id. at 489.

85 Id. 86 See 1-800 Contacts, Inc. v. WhenU.com, Inc., 414 F.3d 400 (2d Cir. 2005).87 Id. at 408–10 (emphasis in original).88 Id. at 409.89 Id. at 410 (“In addition, 1-800’s website address is not the only term in the SaveNow directory that could trigger a Vision Direct ad to

‘pop up’ . . . . For example, an ad could be triggered if a [computer]-user[] searched for ‘contacts’ or ‘eye care,’ both terms contained in the directory, and then clicked on the listed hyperlink to 1-800’s website.”).

90 Id. at 409 n.12.

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placing “its own store-brand generic products next to the trademarked products they emulate in order to induce a customer who has specifically sought out the trademarked product to consider the store’s less expensive alternative.”91

Thus, a consensus appears to have emerged among courts that, as long as pop-up ads appear in a separate window and do not use another’s trademark in the advertisement itself, they generally do not violate the Lanham Act. This reasoning, developed in the pop-up advertising context, has held considerable sway over the outcome of keyword-advertising cases, which are considered next.

C. Keyword Advertising

Like pop-up ads, “keyword advertising” typifies the interactive contemporary approach to Internet branding. By actively anticipating the content of consumers’ searches, keyword advertising allows a brand owner to purchase commonly used search terms, or “keywords,” from an Internet search engine like Google, so that an advertisement and link to the company’s website appears as a “sponsored link” anytime consumers enter a search incorporating the keyword.92 For instance, using Google’s “AdWords” program, “an advertiser can bid on terms (keywords) an Internet user might enter as a search term on Google.”93 Google then links the purchased keyword terms with the advertiser’s sponsored link or advertisement. “When an Internet user enters the keyword, it triggers the sponsored link to appear on the search results page either to the right or immediately above the search results.”94 In tandem with this program, Google has developed a “Keyword Suggestion Tool,” which it employs to recommend customized keywords to advertisers.95

Keyword advertising has proven to be an effective marketing tool and has generated substantial developments in trademark law.96 Disputes over keyword advertising have arisen in part because search engines do “not always identify sponsored links as advertisements and . . . design[] those appearing at the top of the search results to look like part of the ‘non-sponsored’ [or ‘organic’] search results,”97 leading Internet users possibly to infer that a sponsored link is the most responsive search result or is associated with a trademarked term the user entered.98

91 Id. at 411.92 For example, when an Internet user enters a search on Google, the search engine compares the entered search terms with Google’s

databases of Web sites to “generate[] a listing of the sites matching those terms. These results are known as ‘organic listings.’ . . . Google [also] sells the opportunity to have advertisements appear alongside the organic listings. In the Google system, such advertisements appear as ‘Sponsored Links’ to the right of the organic search results.” Gov’t Employees Ins. Co. v. Google, Inc., 77 U.S.P.Q.2d 1841, 1843 (E.D. Va. 2005) [“GEICO v. Google”].

93 Rescuecom Corp. v. Google, Inc., 456 F. Supp. 2d 393, 397 (N.D.N.Y. 2006).94 Id.95 Id.96 See generally Jacob Jacoby and Mark Sableman, Keyword-Based Advertising: Filling in Factual Voids (GEICO v. Google), the

traDemark reporter 681–751 (2007); Eric Goldman, Deregulating Relevancy in Internet Trademark Law, 54 emory L.J. 507 (Winter 2005).

97 Rescuecom Corp., 456 F. Supp. 2d at 397.98 As this article was being written, the gourmet fruit seller, Harry and David, filed suit against its rival Hickory Farms, Inc., alleging that

Hickory Farms misleads consumers who search for “Harry and David” by directing them to Hickory Farms’ website rather than to Harry and David’s site. See Harry & David v. Hickory Farms, Inc., No. 09-cv-3011 (D. Or. 2009).

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Thus far, it appears that the use of another’s mark in the text of a keyword-triggered advertisement or sponsored link likely will result in a finding of trademark infringement.99 For example, in GEICO v. Google, the search engine Google allowed GEICO’s competitor insurance companies to purchase “GEICO” as a keyword which, when entered as a search term, would trigger competitors’ advertisements under the “sponsored links” shown next to the “organic listings” generated by the search.100 GEICO contended this practice violated the Lanham Act by misleading consumers to infer an association between those “sponsored links” (and the insurance companies they led to) and GEICO. Google, on the other hand, maintained “that the Internet is still governed by traditional trademark infringement and fair competition principles,” pursuant to which “placing an advertisement—especially one that does not mention a competitor by name—next to a competitor’s own advertisement does not violate the Lanham Act.”101 Following a bench trial, the court held that “‘Sponsored Links’ that do not reference GEICO’s marks in their headings or text” do not create a likelihood of confusion and thus are non-infringing.102 But “the use of GEICO’s trademarks in the heading or text of advertisements that appear when a user searches on ‘GEICO’ does violate the Lanham Act . . . .”103

While courts have been in agreement for some time that displaying another’s mark in a sponsored link or ad constitutes a Lanham Act violation, until recently there has been a split among courts over whether trademark infringement has occurred when a defendant’s “sponsored link” or keyword-triggered advertisement does not display plaintiff’s mark, but employs it only in the directory of keywords that trigger the sponsored link or ad. For instance, district courts in the Second Circuit have held that a defendant’s inclusion of another’s trademark in a list of keyword terms that trigger sponsored links does not constitute trademark infringement,104 while the Ninth Circuit in Playboy Enterprises, Inc. v. Netscape Communications Corp. held that merely selling another’s trademark as a keyword to be used in an internal keyword directory will give rise to a cognizable claim.105

At the heart of this issue are courts’ interpretations of the term “use in commerce” in the Lanham Act—a controversy with roots in the pop-up ad context. Specifically, drawing on the Second Circuit’s 1-800 Contacts pop-up ad decision, district courts in the Second Circuit have strictly interpreted the “use in commerce requirement” in favor of defendants, while courts outside of the Second Circuit generally have interpreted that requirement more leniently in favor of plaintiffs.

In Rescuecom Corporation v. Google, Inc., for example, the plaintiff sued Google for its practice of allowing advertisers (including plaintiff’s competitors) to bid on and purchase terms, including trademarks, that an Internet user could enter as a search term.106 In granting Google’s motion to dismiss, the Northern District of New York found that Google’s “use” of Rescuecom’s mark was

99 See mCCarthy, supra note 74, § 25:70.25.100 77 U.S.P.Q.2d at 1843, 1847–48.101 Id.102 Id. at 1847.103 Id. at 1842.104 See, e.g., Rescuecom Corp. v. Google, Inc., 456 F. Supp. 2d 393, 403 (N.D.N.Y. 2006); Merck & Co. v. Mediplan Health Consulting, Inc.,

425 F. Supp. 2d 402, 415 (S.D.N.Y. 2006).105 354 F.3d 1020, 1029 (9th Cir. 2004) (reversing district court’s summary judgment in favor of defendants).106 456 F. Supp. 2d at 397–98.

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purely internal: “[T]here is no allegation that any of the links among the search results, except those belonging to plaintiff, display plaintiff’s trademark or that defendant’s activities effect the ‘appearance or functionality’ of plaintiff’s website.”107 Accordingly, as in 1-800 Contacts, the court held that use of a trademarked term in a computer directory or program, which is not displayed or communicated to the public, does not violate the Lanham Act.108

The Southern District of New York reached a similar conclusion in Merck & Co. v. Mediplan Health Consulting, Inc.109 There, the court also granted the defendant’s motion to dismiss, reasoning that the internal use of plaintiff’s ZOCOR mark as a keyword to trigger the display of sponsored links does not constitute “use in commerce” under the Lanham Act.110

But elsewhere, courts have found that merely selling or purchasing others’ trademarks as keywords constitutes “use” under the Lanham Act, and is sufficient to survive a Rule 12 or summary judgment motion. For instance, in Edina Realty Inc. v. TheMLSonline.com,111 the District of Minnesota denied the defendant’s summary judgment motion where the defendant had purchased the plaintiff’s trademarks as search terms from Google and Yahoo. Similarly, in 800-JR Cigar, Inc. v. GoTo.com, Inc.,112 the District of New Jersey held that GoTo.com used the plaintiff’s trademarks in commerce by selling them as search terms. And, in Google Inc. v. American Blind & Wallpaper Inc.,113 the Northern District of California denied Google’s motion to dismiss American Blinds’ claims that Google’s sales of ad words, including American Blinds’ trademarked terms, constituted trademark infringement. Other courts have reached similar results.114

On the eve of this article’s publication, the Second Circuit issued a ruling that appears to have resolved the split in authority. In Rescuecom Corp. v. Google, Inc., the Second Circuit vacated the above-described dismissal by the Northern District of New York of Rescuecom’s keyword advertising claim against Google.115 In vacating the district court’s decision, the Second Circuit relied on two key factual distinctions between Rescuecom and 1-800 Contacts. “First, in contrast to 1-800, where we emphasized that the defendant made no use whatsoever of the plaintiff’s trademark, here what Google is recommending and selling to its advertisers is Rescuecom’s trademark.”116 In other words, because the plaintiff in 1-800 Contacts did not claim its website as a trademark, the defendant’s use of that website in its internal directory of triggering terms could not be considered “use” of a trademark.117 “Second, in contrast with the facts of 1-800, where the defendant did not

107 Id. at 401.108 Id. at 402–03. 109 425 F. Supp. 2d at 415.110 Id.111 80 U.S.P.Q2d 1039, 1045–46 (D. Minn. 2006).112 437 F. Supp. 2d 273, 285 (D.N.J. 2006).113 74 U.S.P.Q.2d 1385, 1391–94 (N.D. Cal. 2005).114 Buying for the Home, LLC v. Humble Abode, LLC, 459 F. Supp. 2d 310, 323 (D.N.J. 2006) (holding that defendant made use of plaintiff’s

trademarks by purchasing them as search terms); Florists’ Transworld Delivery, Inc. v. Fleurop-Interflora, 261 F. Supp. 2d 837, 850 (E.D. Mich. 2003) (denying defendant’s motion to dismiss plaintiff’s Michigan Consumer Protection Act claim for “unfair” or “deceptive” trade practices when defendant operated domain names allegedly incorporating plaintiff’s trademark).

115 No. 06-4881-cv, slip op., at 15 (2d Cir. Apr. 3, 2009).116 Id. at 11. 117 Id.

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‘use or display,’ much less sell, trademarks as search terms to its advertisers, here Google displays, offers, and sells Rescuecom’s mark to Google’s advertising customers.”118 Indeed, Google even “encourages the purchase of Rescuecom’s mark through its Keyword Suggestion Tool.”119

This newly emerging consensus appears to make clear that offering for sale or selling keywords constitutes a “use in commerce” that may give rise to infringement. Whether a given use is likely to cause confusion still requires a case-by-case analysis, and other areas of keyword-advertising law, such as whether the sale or purchase of potentially misrepresentative keywords will give rise to cognizable Lanham Act claims, remain relatively unclear.

D. Screenscraping

Moving from relatively subtle forms of Internet-based potential trademark infringement to more overt acts, screenscraping—also referred to as “web scraping” or “web crawling”—refers to extracting content from another’s website in order to display the content elsewhere. Scraping is typically conducted as a shortcut to collecting one’s own data. When the information collected is copyrighted, trademarked, or serves a source-identifying purpose, screenscraping is generally prohibited. For example, the terms of use for the Yellowpages.com website provide in part:

You may view, use, copy, and distribute the Materials found on YELLOWPAGES.COM Web sites for internal, noncommercial, informational purposes only. You are prohibited from data mining, scraping, crawling, or using any process or processes that send automated queries to the YELLOWPAGES.COM Web site. You may not use the YELLOWPAGES.COM Web sites to compile a collection of listings, including a competing listing product or service.120

But enforcing such prohibitions is another issue. A number of courts have relied on principles of trespass to address screenscraping.121 Analogous to decisions in the pop-up ad and keyword advertising contexts, a finding that scraping constitutes a “use” of the site (and that the scraper is bound by the site’s terms of use) has been critical to the outcomes of court decisions; indeed, a user may be bound by the terms even if it did not specifically agree to them.122

118 Id. 119 Id.120 See http://www.yellowpages.com/about/terms.121 See, e.g., Ticketmaster Corp. v. Tickets.Com, Inc., No. 99 CV7654, 2000 U.S. Dist. LEXIS 12987 (C.D. Cal. Aug. 10, 2000), aff’d, 248

F.3d 1173 (9th Cir. 2001) (finding that a trespass claim based upon web crawling had “some merit” but not enough to justify the issuance of a preliminary injunction); eBay, Inc. v. Bidder’s Edge Inc., 100 F. Supp. 2d 1058 (N.D. Cal. 2000) (finding that a web crawler’s generation of 80,000 to 100,000 requests a day to a website constituted a trespass to chattels); Oyster Software v. Forms Processing, No.C-00-0724 JCS, 2001 U.S. Dist. LEXIS 22520 (N.D. Cal. Dec. 6, 2001) (although web crawlers placed only a “negligible” load on a website’s servers, no more than mere “use” of a plaintiff’s computer system was necessary to establish a trespass claim); American Airlines, Inc. v. Furichase, Inc., No. 167-194022-02 (Tex. 7th Dist. Ct., Texas, Mar. 8, 2003).

122 See Cairo, Inc. v. Crossmedia Servs., Inc., No. 04-04825, 2005 WL756610 (N.D. Cal. Apr. 1, 2005) (repeated use of a site’s web pages can form the basis for imputed knowledge of the site’s terms even if the “use” is by a crawler that does not read the terms); Compuserve, Inc. v. CyberPromotions, Inc., 962 F. Supp. 1015 (S.D. Ohio 1997) (one need not show interference with property in order to establish trespass under California law; use is sufficient).

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The Computer Fraud and Abuse Act (“CFAA”)123 and parallel state law provisions124 also have been used to assert claims against screenscrapers. In E F Cultural Travel B.V. v. Zefer Corp.,125 for example, a travel agency scraped its competitor’s site to collect tour prices in order to set its own prices consistently lower. The district court granted a preliminary injunction because the scraper exceeded the “reasonable expectation” of authorized access of the scraped site. In doing so, the district court relied on 18 U.S.C. § 1030(a)(4):

Whoever . . . knowingly and with intent to defraud, accesses a protected computer without authorization or exceeds authorized access, and by means of such conduct furthers the intended fraud and obtains anything of value, unless the object of the fraud and the thing obtained consists only of the use of the computer and the value of such use is not more than $5000 in any 1-year period . . . shall be punished . . .

“Exceeds authorized access,” as defined by the CFAA, means “to access a computer with authorization and to use such access to obtain or alter information in the computer that the accessing party is not entitled so to obtain or alter.”126 The district court concluded, and the court of appeals affirmed, that a web crawler obtained information it was not entitled to obtain under the terms of use of the site and therefore exceeded authorized access.127

More recently, a Texas district court in Southwest Airlines Co. v. Boardfirst, LLC128 relied on a breach of contract theory to address screenscraping. There, the court found that the defendant had clearly agreed to the site’s terms of use when it used the site after having received a demand letter that notified it of the same, and that use inconsistent with those terms would constitute a breach of contract.

Some businesses and industries welcome screenscraping as a means of facilitating the flow of information.129 But when a business’s valuable intellectual property is at stake, would-be plaintiffs should look beyond conventional copyright and trademark law remedies to options for causes of actions sounding in trespass, breach of contract, and the CFAA.

123 18 U.S.C. § 1030.124 Most states have statutes comparable to the Computer Fraud and Abuse Act. See e.g. California Comprehensive Computer Data Access

and Fraud Act, Cal. Penal Code § 502(c) (West 1999 and Supp. 2008); Georgia Computer System Protection Act, ga. CoDe ann. § 16-9-93 (2007), texaS penal CoDe ann. § 33.02(a) (Vernon 2003). A complaint for screenscraping should also assert a claim under the applicable state statute, assuming the statute provides a private cause of action.

125 318 F. 3d 58 (1st Cir. 2003).126 18 U.S.C. § 1030[e][6] (2006).127 The court of appeals determined that while the plaintiff could not prove “damage” as defined under the CFAA, it nevertheless likely

could prove a compensable “loss,” an undefined term under the statute. Plaintiffs generally seek to meet the $5,000 damages threshold by showing that expenses associated with investigation and blocking of the unauthorized access were at least $5,000.

128 Civ. Action No. 3:06-CV-0891-B, 2007 WL 4823761. (N.D. Tex. Sept. 12, 2007).129 See, e.g., Outlaw.com, Ryanair Begins Screen-Scraping Lawsuit, the regiSter, July 9, 2005, available at http://www.theregister.

co.uk/2008/07/09/ryanair_screen_scraping_bravofly/ (“Many websites in the airline and insurance businesses welcome screen-scraping by aggregators as a way of generating new business;” however, the airline plaintiff in the screenscraping case pending in Ireland discussed in this article found the practice objectionable).

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E. Contributory Infringement

The extension of liability for trademark infringement to parties other than direct infringers based on the theory of contributory infringement is well-established. In fact, although contributory infringement has not been expressly operative in the pop-up and keyword advertising contexts discussed above, the fundamental principles of holding liable parties beyond a directly infringing advertiser operate in those contexts much as they do here.

Contributory infringement originated in landlord-tenant law. With the prevalence and rapid growth of the Internet, courts have extended “landlord liability” theory to online marketplaces where sufficient control can be established. It is immaterial “whether the venue is online or in brick and mortar.”130 As set forth by the Supreme Court in Inwood Laboratories, Inc. v. Ives Laboratories, Inc., a defendant is liable for contributory trademark infringement if it “intentionally induces another to infringe a trademark” or “continues to supply its product to one whom it knows or has reason to know is engaging in trademark infringement.”131 Courts have applied Inwood to impose liability on landlords of flea markets and stores where the landlord knew or had reason to know that its premises were being used for the sale of infringing goods.132

Applying the contributory infringement theory to Internet disputes, courts have required a plaintiff to show: (1) that the defendant “exercises sufficient control and monitoring over its website” used by third parties to infringe, and (2) that the defendant continues to supply services to customers it knows or has reason to know are infringing a plaintiff’s trademarks.133

The recent case Tiffany v. eBay most clearly sets forth and applies the law on contributory trademark infringement in the context of the Internet. In that case, Tiffany, a famous jeweler, sued eBay, the prominent online marketplace, alleging contributory trademark infringement based on the pervasive sale of counterfeit Tiffany goods on eBay’s website, claiming that eBay had knowledge of such sales but failed to investigate or remedy the problem.134 Tiffany sought injunctive relief requiring eBay to take affirmative steps to screen for and prevent the listing of counterfeit Tiffany silver jewelry and to remove any such listings appearing on eBay’s website. Specifically, Tiffany wanted eBay to preemptively ban sellers of five or more Tiffany items and to immediately suspend sellers it identified through eBay’s “Verified Rights Owner Program” (“VeRO”) program.135

The Southern District of New York refused to find eBay contributorily liable with respect to the specific instances of infringement identified by Tiffany through the VeRO program because eBay promptly removed the infringing listing, issued warnings and other punishments to the sellers, and

130 Tiffany Inc. v. eBay, Inc., 576 F. Supp. 2d 463, 505 (S.D.N.Y. 2008).131 456 U.S. 844, 854–55 (1982). 132 See Fonovisa, Inc. v. Cherry Auction, Inc., 76 F.3d 259, 265 (9th Cir. 1996) (reversing dismissal and holding that plaintiff had stated a

claim for contributory trademark infringement).133 Tiffany, 576 F. Supp. 2d at 505–508.134 Id. at 469. 135 Id. at 483, 488. eBay’s VeRO (“Verified Rights Owner”) Program permits trademark owners to file Notices of Claimed Infringement

(“NOCIs”) when an owner sees a counterfeit listing on eBay’s site. In response, eBay removes the listing or otherwise cancels any transaction that has already occurred and/or pursues disciplinary action against the seller. Id. at 478.

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notified the buyers.136 Thus, eBay did not continue to supply its services to those it knew or had reason to know were infringing through the VeRO program. Tiffany further declined to impute to eBay knowledge of infringement based on generalized assertions. Specifically, the court decided that “generalized assertions of infringement made by Tiffany” were not “sufficiently specific to impute to eBay knowledge of any and all instances of infringing sales on eBay.”137 Among its evidence, Tiffany provided: (1) demand letters to eBay asserting rampant counterfeiting on eBay’s website; (2) assertions that sellers selling five or more Tiffany items are presumptively selling counterfeits; (3) results from its buying program showing 73%+ of Tiffany items on eBay were counterfeit; and (4) a submission of over 284,000 notices through the VeRO program over four years.138

The court was not persuaded by Tiffany’s evidence. First, the court summarily rejected that demand letters can provide the requisite knowledge for liability. Second, it found that Tiffany’s “five-or-more” assertion was ambiguous. In particular, it found that there were legitimate sales of five or more genuine Tiffany goods, that Tiffany itself did not regularly enforce the five-or-more rule, as its corporate department regularly sold larger quantities, and Tiffany’s CEO admitted the rule was a “shorthand solution” for making eBay do a better job.139 The court noted that imposing the rule would have resulted in the elimination of legitimate Tiffany sales on eBay and declined to impute knowledge to eBay based on this evidence. Finally, the court found that the buying program results and Tiffany’s large number of submissions through the VeRO program were insufficient because they only provided notice that a high percentage of counterfeit merchandise was being sold. The VeRO submissions were simply complaints based on a “good faith belief” that the listing was counterfeit and was not a definitive finding that the listing was in fact counterfeit.140 eBay was “‘not require[d] . . . to refuse to sell to dealers who merely might pass off” goods.141 The court emphasized that genuine Tiffany product was found on eBay’s website.142

In rejecting Tiffany’s argument that eBay engaged in willful blindness, the court focused on eBay’s proactive steps to prevent the sale of counterfeit goods on its website. These included: eBay’s requirement that all users sign a User Agreement which prohibited violations of third party rights; that eBay suspended sellers in an appropriate manner, eBay’s substantial investment ($20 million per year) to combat infringement; eBay’s fraud engine which implemented Tiffany-specific filters to ferret out illegal listings; eBay’s VeRO program; and eBay’s encouragement of rights owners to create “About Me” pages.143 The court also pointed out that Tiffany invested little in monitoring eBay’s website for infringement (between 1.15 and 1.6 full-time employees per month).144

136 Id. at 515–516. 137 Id. at 511. 138 Id. at 481–87.139 Id. at 511–12. 140 Id. at 489. 141 Id. at 509 (internal citations omitted).142 Id. at 513. 143 Id. at 489–91. 144 Id. at 484–85.

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Although the Tiffany court refused to hold eBay contributorily liable based on eBay’s generalized knowledge of infringement, trademark owners should not necessarily dismiss contributory infringement as a potential vehicle for enforcing their rights. Rather, would-be plaintiffs should learn from the lessons of Tiffany, particularly with respect to demonstrating exhaustive policing efforts of their own and to constructing buying-program surveys aimed at demonstrating a defendant’s knowing disregard of a plaintiff’s rights.

F. Virtual Worlds

Finally, in what may be the next frontier in Internet branding, “virtual worlds,” even in their relatively short existence, have become increasingly prevalent and have evolved to become relatively robust in their marketing opportunities. Early “virtual worlds” took the form of text-based fantasy role-playing games, which evolved into large multi-player online role-playing games, such as World of Warcraft, 145 financed by player subscriptions. Other virtual worlds, such as There,146 involve more free-form socializing and are funded by advertising revenues147 and the sale of virtual “objects.”148 More recent social virtual worlds have been brand-devoted promotional virtual social worlds, such as Coca-Cola’s Coke Studios,149 Disney’s Virtual Magic Kingdom,150 and Nickelodeon’s Nicktropolis.151

In both game-based and social virtual worlds, the creator of the game or virtual community generally retains most of the creative control over the environment and provides users relatively limited ability to create new content.152 Thus, most of the potential trademark issues in these environments emanate from the companies that create, own, and run the virtual worlds. These companies have a vested interest in preserving the profitability of their businesses by avoiding primary liability for infringement and limiting their exposure to secondary liability by restricting their users’ creative freedom. Moreover, to the extent these virtual worlds rely on advertising revenue, virtual-world

145 World of Warcraft, http://www.worldofwarcraft.com/index.xml (last visited Mar. 26, 2009).146 There.com, http://www.there.com/ (last visited Mar. 26, 2009). Google also launched a social virtual world in July of 2008, called Lively,

which Google ended on December 31, 2008. See Vindu Goel, How Google Decides to Pull the Plug, N.Y. Times, Feb. 15, 2009, at BU4; Google, Inc., The Official Google Blog: Lively No More, Nov. 19, 2008, http://googleblog.blogspot.com/2008/11/lively-no-more.html.

147 For example, There.com offers six different types of marketing programs to its advertising partners, including a “Virtual Merchandise Program,” a “Hosted Event Program,” and a “World Integration Program.” See There.com, Your Brand in There, http://www.there.com/yourBrand.html (last visited Mar. 26, 2009).

148 Through There.com’s “Developer’s Program,” users can submit designs for new avatar clothing, vehicles, and other objects. Once There.com approves a submission, a user with a basic subscription can use the object for his own use within the environment, and premium members can sell approved their designs to other users to earn “Therebucks.” Therebucks have a relationship to real-world currency, as they can be purchased with a credit card as well. There.com charges a submission fee, a “wholesale” fee for the creation of additional copies of the object for sale, and an auction fee for sale of user-designed objects. See There.com, Developers, http://webapps.prod.there.com/developer/home.cgi (last visited Mar. 26, 2009).

149 Coke Studios, http://www.mycoke.com/index.jsp?tunnel=cokestudios (last visited Mar. 26, 2009); see also Virtual Worlds Review, Coke Studios, http://www.virtualworldsreview.com/cokestudios/ (last visited Mar. 26, 2009).

150 Virtual Magic Kingdom, http://disney.go.com/games/?name=VMKHomePage (last visited Mar. 26, 2009); see also Virtual Worlds Review, Virtual Magic Kingdom, http://www.virtualworldsreview.com/vmk/ (last visited Mar. 26, 2009).

151 Nicktropolis, http://www.nick.com/nicktropolis/game/ (last visited Mar. 26, 2009).152 See, e.g., There.com, Submission Guidelines, http://webapps.prod.there.com/developer/developer_help_sg.xml (last visited Mar. 26,

2009) (listing content restrictions for user-created design submissions).

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creators have additional interest in making their “worlds” safe and inviting to the marketing campaigns of “real world” brands.153

A different situation exists in user-generated virtual worlds, such as Linden Lab, Inc.’s “Second Life,” which give its users far greater freedom in developing content.154 User-generated virtual worlds create both unique branding opportunities and new trademark protection problems.

In Second Life, companies like Coca-Cola and Nestle have enjoyed success in implementing non-traditional marketing and advertising strategies that focus on customer relationships, entertainment, and increasing brand awareness and affinity. These strategies involve developing Second Life avatar “brand ambassadors” to interact with Second Life users and hosting contests and events in Second Life—such as Coca-Cola’s “Virtual Thirst” competition155 and Nesquik’s QuikSk8 Park virtual skate park, user-generated graffiti art contest, and Nesquik bottle treasure hunt.156 By contrast, many brands that have attempted to create exclusively commercial presences in Second Life have been disappointed in their forays into the 3D virtual world.157

In addition to creating new opportunities for companies to market and expand their brand’s reach, the creative freedom given to Second Life users also creates an additional—and relatively un-policed—front in brand protection. While Second Life is a “virtual world,” it has a real economy, with an official currency (the Linden), a currency exchange (the LindeX), and daily market reports (the Linden Dollar Exchange reports a rate between 250-270).158 Real money is changing hands in this virtual world through the buying and selling of virtual goods and services, and it is happening to the tune of $35 million a month.159 This real economy brings many uses of brands and trademarks in the Second Life marketplace within the trademark definition of “use in commerce,” distinguishing it from cases of unauthorized non-commercial uses of trademarks in video games and in other virtual communities which courts held to be non-trademark uses protected by freedom of expression.160

153 See Greg Lastowka, Virtual Trademarks, 24 Santa Clara Computer & high teCh. l.J. 749, 767 (2008); see also There.com, Submission Guidelines, http://webapps.prod.there.com/developer/developer_help_sg.xml (last visited Mar. 26, 2009) (“The relationship we have with our partners is very important to us and we want to be respectful and responsible towards them. As a result, we cannot allow advertisements for companies that are not currently our partners.”).

154 Linden Lab, Inc., Second Life, http://secondlife.com/ (last visited Mar. 26, 2009). Linden Lab states on Second Life’s Frequently Asked Questions webpage that “Second Life virtual world provides almost unlimited freedom to its Residents. This world really is whatever you make it. . . . You also own anything you create—Residents retain intellectual property rights over their in-world creations.” Linden Lab, Inc., Second Life FAQ, http://secondlife.com/whatis/faq.php (last visited Mar. 26, 2009).

155 In April 2007, Coca-Cola encouraged Second Life residents to use its brand in user-created content for its “Virtual Thirst” contest, which solicited submissions of “virtual vending machines” that “could dispense—not Coca-Cola—but the ESSENSE of Coca-Cola: refreshment, joy, unity, experience.” Adam Reuters, UPDATE—Coca-Cola Gives Away Its Trademark in SL?, Second Life News Center, June 28, 2007, http://secondlife.reuters.com/stories/2007/06/28/coca-cola-gives-away-its-trademark-in-sl/.

156 See Moderne Interactive, Nestle Case Study, http://modernecommunications.com/case-studies/Case-Study-Nesquik.pdf (last visited Mar. 26, 2009) (describing a Nestle brand Second Life case study in which Moderne Interactive gauged the impact of various creative solutions for increasing real-world brand awareness and brand affinity by developing a Second Life brand presence and holding interactive events to engage Second Life residents).

157 See Reuters Newswire, Companies Shifting Virtual World Strategies, Second Life News Center, Oct. 11, 2007, http://secondlife.reuters.com/stories/2007/10/11/companies-shifting-virtual-world-strategies/ (last visited Mar. 26, 2009).

158 Linden Lab, Inc., Second Life: LindeX™ Market Data, http://secondlife.com/statistics/economy-market.php.159 Linden Lab, Inc., Second Life: The Marketplace, http://secondlife.com/whatis/marketplace.php (last visited Mar. 26, 2009) (“In 2008

more than USD $100 million worth of L$ were both and sold on the LindeX.”). 160 See E.S.S. Entm’t 2000, Inc. v. RockStar Videos, Inc., 444 F. Supp. 2d 1012 (C.D. Cal. 2006) aff’d, 547 F.3d 1095 (9th Cir. 2008); Marvel

Enters., Inc. v. NCSoft, Corp., 74 U.S.P.Q.2d 1303 (C.D. Cal. 2005); see also Lastowka, supra note 148, at 779.

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In 2007, a search within Second Life revealed the proliferation of unauthorized virtual goods for sale under the marks of well-known brands, including 16 Second Life stores selling FERRARI virtual cars, 40 stores advertising ROLEX and CHANEL branded virtual watches, and 50 stores selling RAY BAN, PRADA, and GUCCI brand virtual sunglasses.161 While the low U.S. dollar Second Life market price of these infringing virtual goods (ranging from $7.75 for the FERRARI virtual car to $.75 each for the virtual counterfeit designer sunglasses),162 may seem insignificant to brand owners, ignoring unauthorized commercial uses of a brand’s trademarks could lead to more significant problems in the future. Failure to police and protect a brand’s trademarks in the face of unauthorized commercial uses could potentially implicate future laches and acquiescence defenses to trademark infringement, lead to dilution of a mark’s strength, increase the possibility that tarnishing uses could arise, and affect a mark’s fame and ability to identify a unique source.

When it comes to the methods for protecting brands from harm from unauthorized use in virtual worlds, however, companies have chosen varied ways to approach the situation. For example, office furniture maker Herman Miller responded to unauthorized Second Life sales of virtual copies of its AERON chairs and other products by sending cease and desist letters to the infringers, after first opening its own Second Life store and offering to exchange, for free for a limited time, the knock-off Herman Miller virtual goods for authentic Herman Miller virtual goods.163 Contrast this approach with that of Coca-Cola in its “Virtual Thirst” competition discussed above, in which Coca-Cola gave Second Life residents limited permission to use its trademark.164 Regardless of the approach a brand owner takes in protecting its mark in virtual worlds, the reality of the commerce in Second Life requires at the very least that brand owners monitor the use of their marks in virtual worlds and make efforts to educate virtual world users regarding their brand property.165

II. Conclusion

Even though the law surrounding Internet branding has existed for less than two decades, already it has created entirely new areas of practice and distinct lines of precedent. Given its still nascent state, the challenges facing brand owners on the Internet continue to evolve and require vigilance in monitoring not only a brand’s marks and accompanying goodwill but the steady fluctuations and new developments in the legal terrain.

161 BenJamin DuranSke, virtual law: navigating the legal lanDSCape of virtual worlDS 150 (2008).162 See id.163 See John W. Crittenden, Real I.P., Virtual Worlds—Issues in Litigating Trademark and Unfair Competition Cases in Second Life and Like

Spaces, in ali & aBa Continuing legal eDuCation CourSe of StuDy, litigating traDemark, internet, anD unfair Competition CaSeS 239, 242 (2008).

164 See Adam Reuters, supra note 150. 165 See Max Vern, Second Life—A New Dimension for Trademark Infringement, 90 J. pat. & traDemark off. SoC’y 51, 55 (2008).

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