Will Bitcoins Spur Even More Online Lawlessness?

Much has already been written about the rise of a new digital currency, the Bitcoin. To some commentators, the Bitcoin is a new type of gold, representing the emergence of a borderless online world, free of annoying governmental interference and ridding the world of obsolete local currencies. To others, the Bitcoin represents just another bubble, or at worst, is the latest shift to a lawless, online "wild west."

But what is Bitcoin exactly? The Bitcoin is a digital currency based on an open source cryptographic protocol and not managed by any central governmental or financial authority. Bitcoins can be transferred through a computer or smartphone without any intermediate financial institution.

The value of a Bitcoin has fluctuated wildly, leading some to speculate that it is the conceptual equivalent of tulip bulbs in Holland in the seventeenth century, which witnessed the absurd valuation of the flowers' roots.

Apart from its sheer novelty, one part of the allure of the Bitcoin is that it can be used in transactions on the black market for all manner of contraband such as drugs and weapons. Another "benefit" to the Bitcoin is its ability to avoid governmental regulations. Consequently, it has become a hacker's dream come true.

Since each Bitcoin transaction is largely independent of any financial institution's intermediary involvement, it becomes difficult if not impossible for governments to restrict or regulate Bitcoin trade as they would traditional currency flow. 

Recently, the U.S. Financial Crimes Enforcement Network (FinCen) issued a formal statement clarifying the scope of various recordkeeping requirements in the Bank Secrecy Act to different types of Bitcoin transactions.

One relevant question raised by some Intellectual Property owners is to what extent an increase in online Bitcoin transactions will even further complicate current efforts to regulate online commerce.

The answer is uncertain. However, given the challenges already involved in ensuring international banking compliance comports with intellectual property rights, the Bitcoin promises only more headaches ahead.

Ironically, the Bitcoin itself is already reportedly being counterfeited, and hackers are stealing them from online "wallets," raising questions about how realistic expectations are that it could possibly function as an actual currency.

Pfizer to Sell Viagra Direct to Consumers Online, Blames Counterfeiting

Pfizer, Inc. is reportedly preparing to sell Viagra-brand sildenafil citrate tablets online directly to consumers, without the need for a pharmacist.

A prescription from a licensed medical doctor is still required. CVS Caremark Corp. will fill the orders made on the company's website, Pfizer said.

Pfizer attributes the unusual move to the prevalence of online counterfeiting, according to a recent story in the L.A. Times.

Online pharmacies have proliferated in recent years, selling fake versions of Viagra and other brand-name drugs at low prices and with no prescription needed.

Viagra has become one of the most popular drug products to counterfeit given its high price and the embarrassment some men experience ordering the drug from a local pharmacy.  

When announcing its move to include online sales, Pfizer cited a recent study that found as few as 3% of websites selling prescription drugs were legitimate pharmacies selling genuine goods.

Viagra is one of Pfizer's top drugs, posting $2 billion in worldwide revenue last year.

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.

Others sought to cash in by trying to federally register trademarks for "Boston Strong," leading to serious questions about their bona fides.

Finally, gruesome and unlicensed photos were stolen from Getty images and the Associated Press, and sold on Amazon.com 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.

Tommy Gun Maker Sues Al Capone For Boozy Trademark Infringement

Saeilo Enterprises, Inc., current manufacturer of the old school Thompson submachine gun (left), often referred to as a “Tommy gun,” recently filed a lawsuit claiming trademark infringement against Chicago-based liquor company, Alphonse Capone Enterprises, Inc.  Capone Enterprises has no clear legal connection to the Chicago gangster of the 1920's, but is clearly attempting to profit from an association with the notorious Public Enemy Number One.

At issue is the fact that Capone Industries has been selling a new brand of vodka under the Tommy Guns name in a bottle that is intentionally shaped like a Tommy gun. 

Saeilo owns a federally registered trademark for TOMMY GUN in connection with actual firearms, and the trademark has been used constantly since 1920 in connection therewith (including use by the Chicago gangster, not the Chicago liquor company).

The gun maker is also the owner of a separate TOMMY GUN trademark that covers clothing. Saelio does not apparently own any federal trademark on the name for alcoholic beverages.


In contrast, Al Capone Enterprises owns a current federally registered trademark for TOMMY GUN for beer, wines and spirits.

The complaint, which was filed in federal court in Chicago in March 2013, alleges that Al Capone Industries does not have authorization to use the Tommy Gun trademarks on alcoholic beverages that carry a reproduction of the Tommy Gun name and distinctive shape. 

Additionally, Saeilo claims that Capone’s conduct not only violates federal trademark laws, but also Illinois state law and common law. Saeilo further brought claims under Illinois’ Trademark Registration and Protection Act, as well as the Illinois Deceptive Trade Practices Act.

As owner of the trade dress rights in the design of the Thompson submachine gun or “Tommy Gun,” Saeilo claimed that Capone’s unlawful use of the Tommy Gun trade dress was likely to cause “confusion or mistake and/or is likely to deceive consumers as to the affiliation, connection of association of [Capone] with Saeilo,” and of course, Saeilo seeks a permanent injunction and damages.

An interesting legal question arises as to whether and when phrases used to describe firearms can be legally trademarked by the gunmaker, or even by others, in connection with alcoholic beverages.

For example, the trademark of Colt Buntline Special .45 is owned by Colt's Patent Firearms Manufacturer. But Colt 45 in connection with clothing is owned by Pabst Brewing Company. It is unclear why Pabst does not own a federally registered trademark for Colt 45 in connection with its malt liquor beverages.

What if the Redskins Lose Their Trademarks, But Keep Using Them?

The Washington Redskins' logo

On Thursday, March 7, 2013 the Trademark Trial and Appeal Board for U.S. Patent and Trademark Office (the "TTAB") heard oral arguments in a case involving a decades-old question: whether the Washington Redskins' federal trademark registrations should be cancelled because they are allegedly offensive to Native Americans.

The case has now been fully briefed and submitted for a decision.  All that remains now is the court's determination: Will the Washington Redskins franchise lose its federal trademark registrations?

Commentators' predictions are mixed. Some argue that, if history is any judge, it would appear that Native Americans are poised to win this most recent battle cancelling the Washington Redskins' famous trademarks. Others aren't so sure, but argue that the poor publicity involved should counsel a branding change.

All commentators agree that what would likely occur if the worst case scenario happens to the Redskins would be years of further appeals to delay the impact of the ruling.  Will the Washington Redskins continue use its brand in the interim?

When confronted with this question, the owner of the team announced that it will "NEVER change its name." (capital letters in original).

But what would happen, long term, if the team loses its federal trademark registrations?  Wouldn't the team still possess at least some rights to prohibit third party uses?

Probably not. Third parties would begin using the name in an unauthorized manner, and take their chances. Without any federal trademark registrations and with a precedential public ruling finding the marks to be offensive and scandalous, the team would face an uphill battle legally protecting and further monetizing its existing brands.

From a practical standpoint, the team would probably face an onslaught of rampant counterfeiting that it could not legally stop. Without any valid or enforceable federal trademark registrations on file, the team would not be able to avail itself of the criminal and other protections that the law authorizes against counterfeiters.  Similarly, there would no longer be any legal bar to importation of unauthorized items bearing the team's name or logos.

Perhaps worse yet, the various lucrative licenses for team-branded products and third party endorsements could be prospectively ignored on the grounds that the team lacks any appreciable intellectual property rights to further license.

It is also worth noting that, even if the team wins this round in the TTAB, some Congressional Democrats have attempted to legislate the issue against the team.

Perhaps the moral of the story is "never say never" when it comes to branding and intellectual property.