Showing posts with label domain names. Show all posts
Showing posts with label domain names. Show all posts

Monday, January 20, 2014

Trends in the Intellectual Property Legal Marketplace

One of the most frequent questions that I am asked is what trends I see in the areas of intellectual property, brand protection and the marketplace for legal services.

There are a few interesting, long-term trends in the data worth mentioning, that affect everyone and not just lawyers or those who work in the brand protection and IP industry.  Perhaps the most glaring one is that:

The Cost of Doing Business Globally is Going Down, But the Cost of Protecting Intellectual Property Keeps Going Up

By 2014, the out-of-pocket costs of engaging in global commercial activity have become extremely low.  In fact, they are the lowest they have ever been.

For example, a relatively desirable Internet domain name can be leased for only a few dollars a year.  Using templates and shared hosting, virtually anyone can design and host an e-commerce website very cheaply.

This is a departure from a decade ago, when designing a website required an understanding of HTML and related computer languages, technical knowledge generally limited to IT Departments and computer consulting firms.

Similarly, marketing has become cheap.  Today, by using free e-mail accounts and social media platforms like Facebook, Pinterest, Google+ and Yahoo! for communication and marketing, and low-cost international distribution and shipping channels like eBay,, AliBaba and others, a well-managed small business can conceivably generate hundreds of thousands of dollars per year in only a short amount of time.

Yet the out-of-pocket cost involved in protecting a brand against Intellectual Property theft and infringement, both online and in the brick and mortar context, continues to spiral ever upward.

For example, the high-profile attorneys in the Apple v. Samsung patent wars charged their clients $1,200 per hour.  The hourly billing rates at all the large law firms have reached an all-time high, with many lawyers routinely charging well over $1,000 per hour.

And clients who choose smaller law firms and those firms that offer "flat fee" arrangements may get a better deal, but are not immune from the increased competition for high-quality intellectual property legal services.  

For example, one small law firm in Maryland posted its flat fees online, and notes that it is charging up to $12,000 for filing a provisional U.S. patent application.  An appeal if it is denied could add another $8,000.  That may be less than a large law firm's services, but just filing for a patent is still an expensive proposition.

And of course, that is just the first step in protecting Intellectual Property.  Filing for a patent or trademark is no guarantee that it will be respected by others. 

When infringers are inevitably discovered, commencing and pursuing complex litigation against them routinely costs companies many hundreds of thousands of dollars per year.

Therefore, it is clear that while many are finding it easier and easier to start and develop businesses, they are also finding it more and more expensive to effectively protect their Intellectual Property assets against thieves and infringers.

What does this trend signify?  It would appear that the marketplace is beginning to fully understand that the legal services offered by experienced Intellectual Property lawyers are at a premium, because branding and IP assets in general are as valuable -- if not more valuable -- than traditional ones.

Friday, November 8, 2013

Gioconda Law Group and Arthur Kenzie Settle Domain Name Dispute

The Gioconda Law Group PLLC and Arthur Wesley Kenzie have settled the dispute that had been pending before the New York federal district court, involving the misspelled domain name GIOCONDOLAW.COM.

The parties to the underlying dispute settled their differences through a mutually acceptable Settlement Agreement under which the GIOCONDOLAW.COM domain name will be permanently transferred to the law firm.  The Agreement is in the process of being submitted to the federal district court for final approval.

The parties disagree about whether the particular methodologies employed constitute an 'interception' of e-mail, and could therefore violate the Wiretap Act.  Furthermore, Arthur Kenzie has denied any wrongdoing or cybersquatting.

However, both parties agree that the vulnerability that this case exposes is indeed very important and one that all organizations should take seriously.

Furthermore, the public disclosure of discovery in this case may have revealed third parties' vulnerabilities in a manner that could have raised even greater data security concerns.

The use of unencrypted, misaddresses e-mail can create significant security risks to organizations, and all all organizations should also consider registering multiple misspellings of their domain names and using encrypted e-mail protocols to mitigate this risk.

Monday, May 13, 2013

Vultures Still Circling After the Boston Marathon Bombing

Now that the dust has just begun to settle on the horrific Boston Marathon terrorist attack of April 15, 2013, and the perpetrators are either buried or in custody, there is another sad aftermath:  consequences from those cashing in on the victims' suffering by exploiting Intellectual Property through fraud and abuse.

For example, hundreds of fake Boston Marathon-related scams popped up purporting to help the victims, requiring authorities, including the IRS, to issue stern warnings.

Time magazine notes that hundreds of Boston Marathon-themed domain names were quickly registered and put up for auction within hours of the tragedy's unfolding.

Finally, gruesome and unlicensed photos were stolen from Getty images and the Associated Press, and sold on in unauthorized e-books.  After an outcry, Amazon pulled the e-books.

The predictably sad repeat of these transparently opportunistic activities after recent tragedies has led some to consider whether anti-fraud laws should be enhanced to include stiffer penalties for fraudulent activities after a mass casualty occurs.

Sunday, December 2, 2012

Feds Seize 130+ Domain Names and Shut Down Websites on Cyber Monday

On the biggest online shopping day of the year with consumers estimated to have spent over $1.5 billion, federal officials shut down over 130 websites that were selling illegal counterfeit items on the Internet.

Project Cyber Monday 3 marks the third year in a row that U.S. Immigration and Customs Enforcement (ICE) has shut down numerous websites selling counterfeit goods.

“Everything from Ergobaby carriers to New Era hats, Nike sneakers, Tiffany jewelry, Oakley sunglasses and NFL jerseys, just to name a few. Even counterfeit Adobe software was for sale,” ICE Director John Morton said during a conference call.

ICE’s National Intellectual Property Rights Coordination Center  and Homeland Security Investigations partnered with EUROPOL, the European Union’s law enforcement agency, to take down 101 websites that were hosted on U.S. internet servers and 31 websites hosted in Europe.

ICE obtained court orders to shut the websites down after investigators purchased items from the websites and confirmed that the items were fake.

“Counterfeit Hermes purses, Christian Louboutin shoes and various Nike apparel, all of it fake, all of it substandard,” Morton said about the quality of the knock-off items.

“When IP rights are violated, jobs are lost, businesses are stolen and ultimately consumers are cheated. Remember, counterfeiters care about making money and only about making money. They don’t pay health care. They don’t pay pensions. They don’t pay taxes. They don’t care about the people that work for them and they don’t, frankly, care about the consumers who purchase the products,” Morton said.

Wednesday, August 22, 2012

FBI Shuts Down Major Android Application Piracy Sites

On August 21, the FBI announced that it had seized,, and with the cooperation of domestic and foreign governments, for offering illegally pirated android applications in violation of copyright laws.
Between the three sites, they hosted more than 50,000 cracked applications and games, and had collectively over 120,000 followers on Facebook and Twitter.
Prior to the execution of warrants and the seizure of the domain names, FBI agents downloaded thousands of "popular copyrighted mobile device apps" from the alternative online markets.
Apparently these applications were stored on web servers outside the U.S., which required the cooperation of Dutch and French law enforcement agencies.

Monday, August 20, 2012

China Accuses U.S. of Waging an "Invisible War" on the Internet

The Chinese government has demanded that the U.S. cede control of the Internet, accusing it of waging an "invisible war" against its enemies on the web.

In an article appearing in China's official newspaper, China accuses the U.S. of conducting a "pre-emptive strike" by refusing to give up control of the Internet in the name of protecting what it calls a “global resource.”

China claims that the U.S. has taken unfair advantage of its control over the Internet to launch an "invisible war" against its enemies, and to intimidate and threaten other countries.

The article cites as an example how, during the Iraq war, the U.S. government in 2003 asked ICANN to terminate all services related to Iraq’s TLD “.IQ” leading to all websites linked to such domain names disappearing overnight.

The article also points out that 10 of the Internet's 13 root zone servers are located within the U.S., allowing the federal government to "supervise the Internet for national security reasons" under U.S. laws.

By doing so, however, China argues, the U.S. federal government actually gains access to all information transmitted online while "other countries can do nothing about it."

As a "big country on the Internet," China says that it "opposes the U.S.' unreasonable and unilateral management of the Internet" and seeks to work with the international community to "build a new Internet governance system."

Sunday, July 15, 2012

Can Religious Symbols Be Trademarked?

At the intersection of intellectual property, culture and the First Amendment lies the interesting question:  Can religious symbols be trademarked under U.S. law?

In short, the answer is yes.

There is no inherent or statutory bar for a symbol that has acquired religious connotations and spiritual meaning to a group of believers to become protected as a federally registered commercial trademark, provided that certain legal conditions are met.

For example, the mark must be "used in commerce" and become associated with a "single source."

These legal requirements demand that some form of commercial goods or services are offered in connection with the mark by a single entity, either a church, not-for-profit organization or corporation.  Therefore, a "generic" religious symbol such as a crucifix would not be protectable because it represents a system of beliefs that is not associated with a single identifiable "source."  That is, the Roman Catholic Church could lay a claim to it, but so could Orthodox, Protestant denominations, and thousands of other Christian organizations.

Additionally, even the name of a church or religion can be trademarked.  For example, "THE EPISCOPAL CHURCH" is a federally registered trademark for religious instruction services (see right).

In one federal lawsuit testing the bounds of these concepts, the Te-Ta-Ma Truth Foundation-Family (the “Foundation”) sued the World Church of the Creator (the “World Church”), alleging that the World Church infringed its registered trademark for “Church of the Creator.”

The World Church was one of three primary divisions of the white supremacist movement. The mission of the Defendant was twofold: (1) to ensure the survival, expansion and advancement of the white race and (2) to eliminate Jews, blacks and “mud- races.”  The Foundation, on the other hand, was a denomination professing universal love and respect, and actively included everyone who wished to join.  In order words, the beliefs ensconced by the World Church were diametrically opposed to the beliefs practiced by the Foundation and therefore fundamentally incompatible.

On appeal, the Seventh Circuit  Court of Appeals held that the World Church infringed the Foundation’s trademark. The court held that the Foundation’s name did not preclude others from distinguishing themselves and implied that the name encapsulated the Foundation’s identity: “[U]sing ‘Church of the Creator’ as a denominational name leaves ample options for other sects to distinguish themselves and achieve separate identities.”

The issue affects all organized religions.  For example, a Lubavitch Jewish religious group that uses a symbol of the Torah and Hebrew letters on a shield has litigated whether or not this symbol can legitimately function as a trademark. The Trademark Trial and Appeal Board held that it could.

In an article titled "Register Trademarks and Keep the Faith:  Trademarks, Religion and Identity," Professor David A. Simon writes about some of the issues confronted when religious organizations wage secular court battles over the unauthorized use of religious trademarks.

Professor Simon notes that such litigation is not a traditional trademark dispute.  Such cases are focused on protecting rights to compete in commerce.  Here, the dispute is driven by a unique cultural struggle to protect religious identity, but the parties are forced to use the secular litigation system to resolve essentially cultural, "identity" disputes.

He suggests a novel approach to resolving such disputes that is modeled on the Uniform Dispute Resolution Procedure ("UDRP") triggered when there are disputes surrounding the legitimacy of Internet domain names.

In any event, even if permitted under intellectual property law, applying secular trademark concepts to legal disputes involving religious identity and cultural control remains an uneasy fit.

Sunday, July 8, 2012

New gTLD Extensions: Get Ready for the Internet on Steroids

The group which essentially governs the Internet, known as the Internet Corporation for Assigned Names and Numbers ("ICANN"), recently released a list of thousands of applications for new generic top-level domains ("gTLD's"). Once approved, these new extensions would add to the already growing list of domain extensions that include popular .COM, .NET and ,ORG, and somewhat less popular .BIZ, .INFO, and .US. The applications include obvious brand protection extensions like .GOOGLE and .TIFFANY, as well as thousands of generic applicants like .SHOP and .STORE. Demand Media alone submitted more than 130 applications, including .AIRFORCE, .ARMY, .NAVY and .NINJA(huh?). The primary problem from a brand protection standpoint is that the Internet domain name system is already glutted with a virtually infinite number of available combinations to promote mischief and erode brand reputation online. To demonstrate the point, here is a list of just some of the applied-for Top Level Domains in the ICANN new gTLD Program 2012:

  • .adult
  • .auto
  • .baby
  • .boats
  • .book
  • .car
  • .cards
  • .cars
  • .diamonds
  • .diet
  • .dog
  • .energy
  • .equipment
  • .events
  • .events
  • .flowers
  • .furniture
  • .garden
  • .gift
  • .glass
  • .gold
  • .grocery
  • .guitars
  • .home
  • .homegoods
  • .homesense
  • .horse
  • .house
  • .jewelry
  • .kids
  • .kitchen
  • .luxe
  • .luxury
  • .mail
  • .media
  • .memorial
  • .mobile
  • .motorcycles
  • .pets
  • .pharmacy
  • .phone
  • .photo
  • .photography
  • .pics
  • .pictures
  • .porn
  • .sex
  • .sexy
  • .solar
  • .tattoo
  • .tickets
  • .tickets
  • .tires
  • .tools
  • .toys
  • .video
  • .watch
  • .wedding
  • .yachts
  • .clothing
  • .beauty
  • .fashion
  • .hair
  • .ink
  • .makeup
  • .salon
  • .shoes
  • .skin
  • .spa
  • .style
  • .tattoo
  • .ads
  • .and
  • .are
  • .auction
  • .bargains
  • .best
  • .bid
  • .black
  • .blackfriday
  • .blue
  • .boo
  • .buy
  • .buzz
  • .center
  • .channel
  • .cheap
  • .christmas
  • .city
  • .click
  • .codes
  • .community
  • .compare
  • .cool
  • .country
  • .coupon
  • .day
  • .deals
  • .direct
  • .directory
  • .discount
  • .dot
  • .duck
  • .ecom
  • .ads
  • .exchange
  • .exposed
  • .express
  • .fail
  • .feedback
  • .foo
  • .forsale
  • .free
  • .frontdoor
  • .glean
  • .global
  • .gripe
  • .guru
  • .hangout
  • .here
  • .home
  • .hot
  • .ing
  • .jot
  • .joy
  • .land
  • .link
  • .loft
  • .lol
  • .market
  • .markets
  • .media
  • .meme
  • .new
  • .next
  • .ninja
  • .now
  • .online
  • .page
  • .parts
  • .pink
  • .place
  • .plus
  • .prod
  • .promo
  • .qpon
  • .red
  • .rocks
  • .sale
  • .save
  • .seek
  • .shop
  • .shopping
  • .silk
  • .site
  • .space
  • .spot
  • .star
  • .store
  • .sucks
  • .support
  • .today
  • .top
  • .town
  • .trading
  • .tube
  • .web
  • .website
  • .world
  • .wow
  • .wtf
  • .xyz
  • .yellowpages
  • .you
  • .zip
  • .zone

Concerned about the implications for online brand protection yet?

Saturday, July 7, 2012

Internet Independence Declared, But the War to Regulate the Internet Has Only Just Begun

Wikipedia, Yahoo, Google and Facebook are among the usual suspects that have successfully galvanized public opposition to proposed online regulations.  The same cast of characters recently declared an Internet "Day of Independence."  But those seeking to enforce existing laws and enter into treaties regulating the Internet are finding themselves facing even more formidable foes – ranging from China to the U.S. Federal Reserve Bank.  And all signs suggest that the war to regulate commerce on the Internet has only just begun.

Part I:  Early Attempts at Regulation

Having been accused of aiding and abetting trademark infringement by jewelry icon Tiffany & Co., online auction site eBay successfully convinced the U.S. Court of Appeals for the Second Circuit that it was not vicariously responsible for the multitude of counterfeit Tiffany products that were being sold through its popular trading platform. Rather, the appeals court held that the onus lies on the brand owner to diligently police its marks against counterfeit items sold by eBay users.

After the eBay decision, brand owners’ focus began to shift away from eBay when seeking to stop the online sale of counterfeits, and began to focus more on websites and China-based “trading boards,” such as Alibaba, TradeTang, DHGate, Taobao and others. “Posting on these heavily-trafficked wholesale sites, a manufacturer located in mainland China or Hong Kong can make and sell hundreds of thousands of counterfeit products per week, and ship to distributors located all around the globe.  His sales make ten thousand listings for counterfeit goods on eBay seem like small potatoes in comparison,” says one source familiar with the Chinese trading sites.

As China’s online infrastructure expands, so too does the number of trade board users.  According to estimates, China now has 1 billion mobile phone subscriptions, but only about 14 percent of these already operate on China’s faster 3G networks, a number that will only increase as that nation invests in cellular infrastructure.

As a result, international trading boards run by Chinese Internet giant Alibaba Group are gearing up for an explosion in the number of consumers using their smartphones and tablet devices to buy products online in the next two years.  For example, Taobao Marketplace and Taobao Mall, which between them account for more than 400 million users, are already reporting a rapid sales growth by means of their iPad and iPhone applications.

Part II:  The Empire Strikes Back

The Chinese government has not sat idly by while its growing online companies are accused of harboring online counterfeiters.  When the U.S. Trade Representative recently listed Alibaba’s Taobao online retail site as one of the world’s most notorious markets in a U.S. government report, China’s Ministry of Commerce shot back with a vigorous attack:  “Since there is no conclusive evidence, there is no detailed analysis, this is very irresponsible and not objective,” said China Ministry of Commerce spokesman Shen Danyang.  “China believes the U.S. should … make fair assessments and avoid creating unnecessary negative effects for Chinese companies.”

In response to the mounting pressure, Alibaba hired high-powered lobbying firm Duberstein Group, and former Bush White House trade official James Mendenhall, now a partner at First Lady Michelle Obama’s former law firm Sidley & Austin, to represent Alibaba Group in talks with the U.S. government and industry groups.  These measures have already improved Alibaba Group’s image.

But an increase in the number of recently filed court cases suggests that the number of Chinese merchants that are actively trafficking in counterfeit goods on the Internet, through the use of “rogue websites” operating under spurious domain names incorporating trademarked brands, continues to skyrocket.

According to brand owners, “rogue websites” are unauthorized e-commerce sites that mimic legitimate channels of trade.  Consumers are lured to these sophisticated and well-designed websites that are replete with corporate advertising, credit card logos, and other indicia of legitimacy.  These sites often call themselves “sale outlets” in order to suggest that their merchandise is authentic.

However, such sites are actually devoted to illicit conduct, typically trafficking in counterfeit products, or offering illegal downloads of pirated music, movies or software.  These sites are also sometimes also used to steal consumers’ identities when the consumer reveals credit card information to make purchases, according to experts.  The U.S. Chamber of Commerce notes that studies demonstrate the dire implications and consequences of rogue websites distributing their illicit goods and illegal content to consumers.

Part III:  The Long Arm of the United States

In response to the growing problem, U.S. law enforcement and brands alike have taken concerted legal action against thousands of such sites in recent months. Similarly, the U.S. Department of Justice’s recent international raids on MegaUpload sent the signal that the federal government does not perceive online digital piracy of movies and music to be a victimless crime.

But following through to see these complex cases to completion is another story.  First, online distribution networks are fluid, and the common ownership and control of rogue websites is very difficult to trace and track down, requiring constant monitoring.  For example, forensic investigators using advanced data-mining software programs such as RogueFinder are able to link dozens — even hundreds — of seemingly unrelated domain names and websites.  This careful research can thereby lay the foundation to properly sue the anonymous entities operating a vast number of infringing websites, but also illustrates the enormous challenge of monitoring online counterfeiting networks that not only grow exponentially but are also in a constant state of flux.

Using this type of data, federal courts in New York, Florida and Nevada have ordered thousands of domain names and corresponding websites to be taken down, and handed over to intellectual property owners.  But Internet counterfeiters can simply shift the infringing content to new websites with new domain names only days later, brazenly hawking the same counterfeit products in open violation of court orders.

Second, no longer relegated to dimly lit basements and backrooms in factories, some accused infringers are now organized--and well represented.  MegaUpload’s founders have showed up in federal court in Virginia represented by mega-firms Hogan Lovells, Squire Sanders, Sidley Austin, and most recently, Quinn Emanuel. 

And their high-priced legal representation has paid off, so far.  The Quinn Emanuel lawyers have already raised questions about the procedural aspects of the Justice Department’s MegaUpload seizures, and have cast serious doubt on whether New Zealand’s arrest warrants will even stick, undoubtedly giving Justice Department lawyers heartburn.  “I frankly don't know that we are ever going to have a trial in this matter,” District Judge Liam O’Grady said to a Justice Department prosecutor at a recent hearing in the case.

Part IV:  "Follow the Money"

Law enforcement authorities have realized the critical importance of regulating online payment processing—which is essential to Internet counterfeiters’ business model—but have found it equally challenging to monitor and seize cash flows associated with the purchase of counterfeit goods online.

In April 2012, the U.S. Department of Justice and U.S. Immigration and Customs Enforcement seized more than $896,000, plus the domain names of seven websites accused of selling counterfeit sports apparel. Aggressively using anti-money laundering statutes in conjunction with the PATRIOT Act’s specific provisions giving the federal government jurisdiction over “Interbank” accounts, the Justice Department was able to use warrants to allow the U.S. to seize $826,883 that had been transferred from PayPal accounts to Interbank accounts held by Chinese banks in the U.S.

However, while the PATRIOT Act gives Justice Department lawyers a powerful weapon, no such provision exists in U.S. law for intellectual property owners acting on their own in civil cases.  In fact, some intellectual property owners have been stymied in their ability to even gather insight into the finances of international counterfeiters from international banks operating in the U.S. itself.

In one such case, Tiffany & Co. alleged that major Chinese state-owned banks maintain bank accounts for counterfeiters in China that ship fake designer goods into the United States.  The three accused banks - Bank of China, China Merchants Bank and the Industrial and Commercial Bank of China - all have branches in New York City.  The luxury-goods maker had petitioned to have the Chinese banks freeze assets in accounts owned by the alleged counterfeiters and turn over information about the clients to their attorneys.

However, the banks’ lawyers pointed out that the Federal Reserve, which regulates New York-based branches of foreign banks, supports the notion of treating each branch as a “separate entity,” and the idea that New York branches of foreign banks cannot be used as conduits through which to export American laws abroad.  A lawyer for the New York Federal Reserve had presented an oral argument in a similar case involving offshore accounts, warning that a decision in favor of disclosure could spark “a global asset hunt” in the New York court system, according to a court transcript.

In fact, an amicus brief the Federal Reserve Bank filed became part of a series of arguments in the Tiffany case that led District Judge Pauley to rule that Tiffany needed to seek information from the banks’ headquarters in China – and not in a New York courtroom.

However, just weeks after the Tiffany decision, another judge in the same courthouse, faced with essentially identical facts, held that luxury brand group Gucci America, Inc., was entitled to information held by Bank of China and other Chinese financial institutions, and that those banks were required to freeze the defendants’ assets. This matter is currently before the Second Circuit Court of Appeals, which is now charged with resolving the contradictory rulings

It is clear that a simple legal solution to bringing the Internet in line with established laws and traditional norms of intellectual property ownership is simply not in the foreseeable future.   Beleaguered intellectual property owners, faced with such significant opposition, must both adapt their existing business models, and continue to lobby for the passage of more creative laws as well as aggressive application of existing laws.  However, doing so will likely place them in a protracted battle with political and commercial forces far more powerful than they may have ever bargained-for.

And that is just the beginning.