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 counsel.

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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

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

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)
6

Licensing Web Content

What kind of license?
What type of grant?
Representations and Warranties
Credit, right of attribution, right of
publicity
7

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?

10

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
12

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
14

Cybersquatting
Trademark, or confusingly similar
mark, is used in a web site address
Prohibited by federal law
Vehicles for domain name recovery

15

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: Anti-circumvention
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)
24

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 similarity
the key test for infringement

Fair Use
25

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 inline links were not infringements of the
copyright owner's rights to copy and
display its work.

35

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
37

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
47

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.
48

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
52

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
56

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
57

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
59

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

61

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
63

How Should Software/Business

Methods be Protected Until the
Supreme Courts Decision?
Software and business methods should 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!