Intellectual Property

on the Web
Trademark, Copyright and
Patent Issues That Impact All
Companies in the Internet Age

The material provided herein is for informational

purposes only and is not intended as legal advice or

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Trademark and Copyright

Issues on the Web
Jeanne Hamburg

Why Important?
Top IP concerns:
Cybersquatting
Unlawful copying of digital media
content
Reverse engineering
Phishing
Sale of counterfeit goods online
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Overview
Transactional Issues:
Licensing Web Content
Web Publishing
Web Site Development

Counseling Issues
Web Content Clearance/Fair Use

Contentious Issues
Domain name recovery (cybersquatting)
DMCA
Litigation of online copyright infringement and licensing
cases
Copyright and trademark issues arising from phishing,
online counterfeiting, key word purchases, hyperlinking,
pop up ads, framing
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Licensing Web Content

Distinguish whether content is being
licensed or just a trademark
Is the content copyrightable?
What type of use is contemplated?
(May not require a license)
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Licensing Web Content

What kind of license?
What type of grant?
Representations and Warranties
Credit, right of attribution, right of
publicity
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Web Publishing
Publish and/or
purchase a book
that is printed and
shipped to you or
to download a
digital copy
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Web Publishing
Form of license, same issues
Technological safeguards on
unauthorized copying
Does third party site have terms of
use prohibiting unauthorized use of
digital content purchased?

Web Site Development

Hiring of third party (independent
contractor) to develop site
Who will own content created and
the html code used to create it?

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Web Content Clearance: Fair

Use
You are a site owner or third party
owning content appearing on third party
site without permission
Cannot assume creative content
(graphic, textual, sound recordings,
etc.) are not protected by copyright
simply because available on web
Sites claim to make material available
that is in the public domain (copyright
has expired) but may not be

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Web Content Clearance

If license content from such a site, look
for representations and warranties that
site owner has the rights
Look for terms of use that may restrict
use of the licensed content; often a
one time click through
Right of publicity/privacy issues if
person is depicted in connection with
promoting a business
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Web Content Clearance: Fair

Use
Fair use codified at 17 U.S.C. 107

Allows the user of copyrighted material to do things

otherwise exclusively the right of the copyright owner
so permission not required
Must be for fair use purposes enumerated by
statute: e.g., criticism, comment, news reporting,
teaching, scholarship, research
Four factor test for fair use: (1) purpose and
character of use; (2) nature of work; (3) amount and
substantiality of portion used; (4) effect on
marketplace value

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Contentious Issues
Cybersquatting
DMCA
Litigation of online
copyright/licensing cases
Trademark and copyright issues
unique to the web
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Cybersquatting
Trademark, or confusingly
similar mark, is used in a web
site address
Prohibited by federal law
Vehicles for domain name
recovery
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Federal Court Action for

Cybersquatting
Rarely done unless there
is also another act of
trademark infringement
Expensive
No showing of bad faith
required
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UDRP Proceedings

Arbitration proceeding
Not necessary to own registered mark
Confusingly similar
No legitimate right to the domain name
Registered in bad faith
ICANN
WIPO in Switzerland and NAF in Minneapolis
Complaint, Reply, and Surreply, then a single
member or three member panel will decide.
All filed electronically.
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DMCA: Service Provider

Liability

DMCA effective weapon for those whose

copyrights are infringed on the web
Makes the host of content, who receives
notice of the infringement from the
copyright owner or its counsel, liable if it
does not take down the content
Fantastic remedy when infringers identity
is not known or infringer is uncooperative
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ISPs Frequently Contacted

Under DMCA
Apple (iTunes, TETRIS infringements)
Google
Gadgets
Android

Amazon
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DMCA: Anticircumvention

Makes it unlawful for someone to

hack through technology designed
to protect the unauthorized
exploitation of copyrightable content
Applies only if the content to which
unauthorized use is being blocked is
copyrightable (e.g. circumvention of
access to alphabetical directory
listing would not violate DMCA)
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Litigating Online Copyright

Infringement Cases
Copyrightable expression (factual data
organized logically not protected)
Access to copyrightable work (can often be
demonstrated with IP addresses)
Copying
Copying is presumed from substantial
similaritythe key test for infringement

Fair Use
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Litigating Online Copyright

Infringement Cases
Must obtain registration before you sue;
expedited registration may be secured for
this purpose (10 days vs. several months)
Preliminary injunction often ends the case
Declaratory judgment is popular for the
alleged infringer
Must bring suit in federal court
Often choice of jurisdiction
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Litigating Online Copyright

Infringement Cases:
Licenses

Click through agreements or terms of

use can raise special issues

Important to attend to the terms

Consent to jurisdiction
Restricts use of content that is not copyrightable
Adhesion: courts generally find these
agreements binding
Authority to bind company
Hospital sued by provider of health care ratings
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Phishing
Criminally fraudulent process of attempting to
acquire sensitive information such as usernames,
passwords and credit card details by
masquerading as a trustworthy entity in an
electronic communication
Communications purporting to be from popular
social web sites, auction sites, online payment
processors or IT administrators are commonly
used to lure the unsuspecting public
Typically carried out by email or IM, and it often
directs users to enter details at a fake website
whose look and feel are almost identical to the
legitimate one. Even when using it may require
tremendous skill to detect that the website is fake
MasterCard/UDRP recovery and investigation
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Legislation on Phishing
No legislation directly prohibits, but there may be
copyright and trademark remedies available since
site content and trademarks are copied
Credit Card Fraud Act
The Identity Theft and Assumption Deterrence Act
Fair and Accurate Credit Transaction Act
California's Anti-Phishing Law
California in 2005 became the first state to enact
legislation designed specifically to deter phishing. Some
victims of phishing, including those who provide Internet
access service to the public, own a Web page, or own a
trademark, may recover up to $500,000 for each proven
violation of the statute. Other victims may recover up to
$5000 for each violation of the statute. The statute also
allows the state's attorney general or a district attorney
in the state to bring an action to enjoin further
violations.

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Online Counterfeiting
Best Practices for Trademark Owners
Educate the public so they are not deceived
on online searches, marketplace and
shopping sites
Request that Payment Service Providers (such
as credit card and debit card companies,
PayPal) terminate service and indemnify PSP
for wrongful termination
Report abuses of PSPs trademark if
trademark owners are unable to make a
purchase on a site bearing the PSPs mark

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Online Counterfeiting
Contact the providers of Internet
shopping services under the DMCA or
Lanham Act

NGC trade dress of coin holders (ebay form)

eBay, Inc.
Yahoo
Google
Amazon
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Is Copying of Hyperlinks a
Copyright Infringement?
In the DeCSS case Universal v. Reimerdes,
2600 Magazine prohibited from posting
hyperlinks to DeCSS code because it found the
magazine had linked for the purpose of
disseminating a circumvention device
Intellectual Reserve v. Utah Lighthouse
Ministry: linking to unauthorized copies of a
text might be a contributory infringement of
the work's copyright
Ticketmaster v. Tickets.com found that
hyperlinks to ticket broker sites copied by
tickets.com from the ticketmaster web site
were not infringements of copyright
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Hyperlinking Best
Practices
In an email, do not provide a live
hyperlink
Beneath a hyperlink in a site,
include a disclaimer that the site
owner is not affiliated with, does
not endorse or sponsor the
trademark owners services
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Framing

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Framing
Perfect 10 v. Amazon.com:
Google's in-line links were not
infringements of the copyright
owner's rights to copy and display
its work.

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Pop Up Ads

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Pop Up Ads
Are a site owners copyrights or
trademarks infringed when a
competitors pop up ad is displayed
when a consumer access the site?
Most courts hold no when:
No use in commerce of the site
owners trademark in the ad itself
Not a derivative work
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Key Word Purchases

Search engines such as Google sell
third party trademarks as key
words which will display the
purchasers web site on a search
by the user for the key
word/trademark

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Key Word Purchases

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Key Word Purchases

US courts split on whether this is
unlawful
Is there likelihood of confusion, trading
off on goodwill earned by the
trademark owner or is this just like a
virtual marketplace where different
branded goods are displayed on virtual
store shelves next to each other?

Issue may be treated differently

abroad and in US
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Pay Per View/Pay Per Click

Advertising
What is PPV/PCC?
Is the PPV or PPC ad of a third party
(not the trademark owner) an
infringement if it does not use the
trademark in the ad but is displayed
on key word search of trademark?
In 2006 Yahoo prohibited PPV or PPC
advertisers from bidding on third
party trademarks

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Pay Per View/Pay Per

Click Advertising
Google's AdSense program still
permits this; 95 percent of
Google's revenue comes from
AdSense.
What are fraudulent clicks?
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Questions & Answers

Session Part 1

Seminar Intermission

Business Method Patents

and the Bilski Case
Chris Casieri

What is a Patent?
Exclusive rights granted to an
inventor for a limited period of time
in exchange for a public disclosure of
the invention
Rights extend for 20 years from
earliest filing date or 17 years from
date of issuance depending when the
application was filed

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What is the Origin of

U.S. Patent Law?
Article I, Section 8, Clause 8 of the
United States Constitution
empowers the U.S. Congress:
To promote the Progress of Science
and useful Arts, by securing for
limited Times to Authors and
Inventors the exclusive Right to their
respective Writings and Discoveries.
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What are the Types of

U.S. Patents Available?
Utility Patents Bilskis application
Design Patents
Plant Patents
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What Types of Subject

Matter are Protectable by a
Utility Patent?
Section 101 of US Patent law sets out:
Whoever invents or discovers any new and
useful process, machine, manufacture, or
composition of matter, or any new and
useful improvement thereof, may obtain
a patent therefore, subject to the
conditions and requirements of this title.
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What is a Business
Method Patent?
Business method patent is a type
of utility patent which is directed to
new methods of doing or
conducting business

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Famous Business
Method Patent and
Industries

Amazons one-click buying patent used

for purchasing on Amazon.com
Business method patents are useful to
the following industries:

E-commerce
Insurance
Investment
Banking
Tax Compliance

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What Are Patent

Claims?

Patent claims define, in legal patent

terms, the extent of the protection
sought in a utility application
A sample patent claim may read:
"Method for computing future life
expectancies, said method comprising
steps X, Y, Z, ..."
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What is the Bilski Case

and What is its History?
The Bilskis patent application is a
pure business method patent
application which has raised
questions about what types of
inventions may be too abstract to
qualify for US patent protection
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In general, Bilskis
main claim requires the
steps of:

Initiating a series of transactions between a

broker and purchaser by which the purchaser
may buy a commodity at a first fixed rate
based on historical price levels
Identifying a producer of the commodity

Initiating a series of transactions between the

broker and producer, at a second fixed rate,
such that risk positions balance out

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Legal History of Bilski

US Patent Examiner rejected all claims
USPTOs Board of Patent Appeals and
Interferences affirmed the Examiners decision
Court of Appeals for the Federal Circuit (CAFC)
affirmed the USPTOs rejection of all claims
Bilski appealed to the US Supreme Court for
review the CAFCs decision
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Why is Bilski
Important?
CAFCs decision was extraordinarily
over broad
As a result, software, pure business
methods, medical diagnostic
methods, biotechnology methods,
medical device and e-commerce
patents may be unpatentable/invalid
in view of the CAFCs decision
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What Test was Adopted by

the CAFC and What was Their
Decision?
CAFC applied a particular machine or
transformation (MOT) test:

A claimed process is surely patent-eligible

under 101 if: (1) it is tied to a particular
machine or apparatus, or (2) it transforms a
particular article into a different state or thing
In other words, transformation/reduction of
an article 'to a different state or thing' is the
clue to the patentability of a process claim
that does not include a particular machine

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Additionally Issues That Further

Narrowed the CAFCs Decision
Include:
Mere field-of-use limitations are generally
insufficient to render an otherwise
ineligible process claim patent-eligible
Insignificant post-solution activity will not
transform an unpatentable principle into
a patentable process
Methods of organizing human activity are
not patent-eligible under US patent law
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What is the Historical

Standpoint Taken by the
Supreme Court?

The Supreme Court typically allows

inventions that incorporate or
apply abstract concepts such as
mathematical formulas, as long as
the invention, as claimed, has a
sufficiently practical impact in the
real world.
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What Alternatives are There

to the MOT Test Adopted by
the CAFC?
In the 1998, the CAFC utilized the
straightforward concrete, useful,
tangible test (the CUT test)
CAFC effectively overruled the CUT
test with their Bilski decision

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What are the Issues

Before the Supreme
Court?

Key question to be considered by the

Supreme Court:
Whether the MOT test should command
patentability outcomes possibly not
intended by Congress or required under
the plain language of the statute

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How May the Supreme

Court Decide?
The Supreme Court may:
Affirm the MOT test, but rule that it is not
the definitive test for determining patent
eligibility
Rule that business methods are inherently
abstract ideas and are not patentable
Affirm the CAFCs decision, making the MOT
test the bright-line test for establishing
patentability under 35 USC 101
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How Should
Software/Business
Methods be Protected
Until the
Supreme Courts
Software and business methods should
Decision?
still be protected
with patents
Patent claims should be included that
satisfy the narrow MOT test
Patent claims satisfying the broader CUT
test should also be included

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Claim Satisfying the MOT

test
A method comprising:

Providing a computer network having a

programmed computer and a VOIP device
Initiating a first sales transaction between
two parties over the computer network via
the VOIP device
Identifying a producer with the programmed
computer over the computer network
Initiating a second sales transaction
between the producer and a party over the
computer network via the VOIP device
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Claim Satisfying the CUT

Test
A method comprising:

Initiating a first sales transaction

between two parties
Identifying a producer
Initiating a second sales transaction
between the producer and a party

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Questions & Answers

Session Part 2
Thank you for coming!