Trademark protection and the Internet

E-business constitutes over $2 trillion in annual sales for our economy, and two-thirds of American households now contain a computer with Internet access. So it is no surprise that businesses try to get a competitive edge with their Web sites. Sometimes those tactics run afoul of traditional notions of trademark infringement and unfair competition.

Legislatures and courts have responded to a point at which, over the past decade, a more predictable playing field has emerged for businesses with respect to their Internet ventures.

By now people have heard about the Wild West-style, claims-jumping behavior surrounding the early issuance of domain names. Prominent businesses were at the mercy of individuals who had registered popular dot-com domain names using the companies’ famous trademarked names. It was not long before Congress passed the Anti-Cybersquatting Consumer Protection Act (ACPA) to prevent Internet squatting on the rights of another business.

ACPA created injunctive and damages remedies to businesses with marks entitled to protection, whether or not they are federally registered. In addition, cybersquatting registrants are now subject to loss of their domain names through an administrative process known as the Uniform Dispute Resolution Policy (UDRP).

For more extensive remedies, including damages for loss of revenue, one still has to go to court, using the ACPA and other statutes.

When an organization heavily relies on new customer visits to its Web site, it is important to police the Internet to make sure there are no domain names similar to your own enterprise. For instance, you can patrol the Internet yourself at regular intervals to search for the company’s name or similar marks, including identical terms using different top-level domain extensions, such as .net, .org, or .us. Alternatively, you can hire a service company to perform such a task, such as MarkMonitor or Cyveillance.

Once you find a hit, you should visit a caching service, such as that offered by Google or WayBackMachine. This will provide an idea of how the Web site may have changed over time. Then you can find out information about the registrant through a domain registration database. Peeling the onion to discover the true identity of a Web site owner may require some ingenuity.

Most Web site owners know by now that search engines, such as Google, crawl the Internet for descriptive terms about Web sites to assist in their search function. In addition to the domain name, search engines read metatags written into the Web site code, which further describe the nature of the site. Some site operators include the trademarked words of competitors in the metatags. For instance, a Hewlett-Packard personal computer retailer might create metatext so that a person typing into a search engine the term “Apple Computer” might end up finding the Hewlett-Packard personal computer retailer.

This phenomenon, defined as “initial interest confusion,” can cause an inquiring buyer mistakenly to visit a Web site which does not sell Apple Computer products. Initial interest confusion is similar to a false billboard directing interstate highway drivers to the next exit for a McDonald’s restaurant. A hungry driver will see the sign, exit the highway, whereupon he or she does not find a McDonald’s, but rather only a rival hamburger chain. The driver, tired and hungry, decides to eat at the rival burger spot instead of searching further for a McDonald’s.

This conduct is generally considered to be trademark infringement, and a court will enjoin the use of that metatext.

An interesting twist on this behavior is found in keyword advertising use by a number of search engines, such as Google’s AdWords program.

For instance, if you were to type an airline company’s name into a search engine, the Web page for that airline would appear as a search result, but alongside that result may be “sponsored links” with advertisements and Web page links to other airlines and discount ticket sellers. In other words, those other airlines and discount ticket seller have bought advertising space wherever there is a search engine inquiry for the trademarked-specific airline name.

In 2006, Congress passed the Trademark Dilution Revision Act to try to give search engines some immunity for these sales of advertising space.

While it is risky, a Web site owner can refer in the text (but not the metatext) of its Web site to the trademarked goods or services of a competitor. In addition, one can use another’s trademarked product by way of comparative advertising. Of course, if the rival’s product is not described accurately by way of comparison, the competitor could bring suit on the basis of another theory, such as deceptive or unfair advertising.

Tom Donovan, a director in the litigation department of McLane, Graf, Raulerson & Middleton, focuses his practice on intellectual property and complex commercial disputes. He can be contacted at 628-1337 or tdonovan@mclane.com.