Online, Legal Trademark Standards Resemble 'The Many Faces of Eve'

As the Internet continues to mature, a split legal personality demonstrates the struggles ahead for domain investors.

Written by Howard Neu on NeusNews.com on March 3, 2011 & January 17, 2011. Edited for space & content.

To come in line with search industry practices, as of March 3rd, MICROSOFT will cease editorial investigations into complaints about trademarks used as keywords to trigger ads on BING & YAHOO! Search in the United States and Canada.

GOOGLE has allowed trademarks to trigger search ads since 2004. While the move troubled some trademark owners -- and even sparked a few lawsuits -- it seems to have been good for GOOGLE's growth.

What's more, GOOGLE has prevailed in court in the few cases that went to trial. Back in 2004 GEICO lost a lawsuit alleging that its trademark was infringed when GOOGLE allowed GEICO rivals to use its name to trigger search ads. The judge in that case ruled that GEICO hadn't proven that consumers were confused by this use of its trademark.

More recently, a federal judge in Alexandria, Va. dismissed a similar trademark infringement lawsuit by ROSETTA STONE against GOOGLE. ROSETTA STONE appealed that decision to the 4th Circuit, which is considering the matter.

Apparently, there is only confusion when Domain Owners use trademarks to create traffic, not when the big boys do. The evidence of this double standard came in January of this year, when a judge in the U.S. District Court the very same MICROSOFT to move forward with a unique type of cybersquatting suit.

Seattle federal district judge, Ricardo Martinez, issued a nine-page opinion January 12 which gave Microsoft the go-ahead to proceed with what he called "a novel cause of action for contributory cybersquatting."

Microsoft filed suit in April 2010 against two companies, Digispace Solutions and yMultimedia, after they allegedly induced others to register domain names that allegedly included Microsoft trademarks or misspellings of some of Microsoft's brand names.

Microsoft argued in an amended complaint that Digispace and yMultimedia "actively and intentionally induced others" to infringe and cybersquat on Microsoft trademarks by providing instruction on how to do so as a way for squatters to increase traffic to their own sites. Microsoft also asserted that Digispace and yMultimedia sold a software product that allowed buyers easily to set up sites that used Microsoft's trademarks. The Microsoft complaint names not only the two companies and their founders, but also 50 John Doe defendants who, according to the complaint, were induced to infringe Microsoft copyrights.

Digispace and yMultimedia's lawyers sought to dismiss Microsoft's claims that Digispace and yMultimedia had induced violations of the federal anticybersquatting law. "No court has ever recognized a cause of action for inducement under the ACPA," the defense contended in its motion to dismiss. "Similarly, no court has ever recognized a cause of action for induced trademark dilution. Both claims should be dismissed here."

How far the courts will carry this remains to be seen as it is really a stretch when there is no statute to back it. It could end up before the U.S. Supreme Court, if the 9th Circuit agrees with Judge Martinez.

Reprinted from The Internet Lawyer, NeusNews.com: http://neusnews.com

Critical ICANN Publications:

Trademark Clearinghouse

Domain owners may be able to understand more about what constitutes a trademark and trademark infringment by consulting with adept legal counsel; however, it is vital to remain aware of which companies are participating in the pending Trademark Clearinghouse.

The Trademark Clearinghouse will not be a part of ICANN, though it is expected the clearinghouse will work closely with ICANN to guard trademark holders' rights over that of domain owners.

Read the ICANN document here.

Information sourced from ICANN.org's November 2010 RFP Final