Lawyer Article

Published in the May 31, 2005 issue of Southeast Tech Wire

Business use to be so simple. If your business was local, you only had to worry about your customers remembering your name and how to find your business – maybe a phone number.

The internet has changed everything. Customers look to find your company online. They go to your web site. They check the online yellow pages. They search for you on Google or Yahoo!.

What happens if the company using your name as a web address – thus precluding you from doing the same – resides in Oregon or Arizona or Botswana? What happens if a disgruntled former employee has secured your company’s name as a web address and is using it to post a website about how much he hates your company? What happens if customer searches for your business only show links to your competitor’s web sites, and not yours?

The internet is rife with opportunities for your customers to be directed away from your business – even if they are specifically seeking your business. The international reach of a cyber search, the ability to publish quickly and disappear just as fast, and the new business models presented by the internet’s “mass customization” have made cyberspace a confusing and dangerous place to protect your company’s name.

American law nearly always lags behind the changes in technology and society. And trademark protection – the ability to protect your company’s names and its product or service names – has been struggling to keep up with the times.

The first wave of internet trademark protection cases arose from cybersquatting and jurisdiction questions. People were taking the names of famous companies and capturing the internet web domains that were logically connected to those names, frequently holding the internet domains for ransom or selling to the highest bidder. The US federal government directly addressed this problem in 1999 when President Clinton signed the Anti-Cybersquatting Consumer Protection Act. The Act particularly targeting pirates who registered famous names intending to profit from the use or sale of the name, and it set up a cost effective method of handling domain name disputes.

Jurisdiction issues and subject overlap issues created some of the earliest trademark problems on the internet. Not only would the “Smith’s Hardware” store in one city now be competing online with the “Smith’s Hardware” stores across the country, but companies like Delta Faucet and Delta Airlines, who had previously co-existed peacefully because their product and service offerings were so different, now competed for the “Delta” name as a web site domain address.

From all of the early internet disputes, case law and new statutes, one general rule became clear. The first party with a legitimate reason to use a name would be allowed to keep that name, unless that party abandoned it or was using the name in bad faith. So if your business name is “Delta”, you are highly unlikely to secure the rights to use your name as a domain locator without adding words, letters or symbols to your name.

Much of the next wave of trademark conflicts online has revolved around search engines and nominative fair use. The last category affects all media, but is a special problem online. A trademark is intended to be used to identify a product or service or the company that provides them. If it is not actually in use, the U.S. Patent and Trademark Office won’t protect it. So, if I have a legitimate need to discuss Microsoft products, I am allowed to use the Microsoft trademark term to identify them. This is a fair and reasonable use of the Microsoft trademark.

However, some people and companies had been misusing their competitor’s names online – sometimes to imply or state a false endorsement, but more often to fool search engines helping customers look for the competitor’s product online. American courts now use a test famously determined in a case concerning use of the term “New Kids on the Block”. Under this test, you can use a famous or competing mark where 1) the product you are discussing is not readily identifiable without use of the mark, 2) you are not overusing the mark, and 3) you are not suggesting sponsorship or endorsement of the mark holder.

In other recent search engine related cases, courts generally hold that, if you have a distinctive name, a search engine company may not sell your company’s name to a competitor, so that the competitor’s name automatically appears ahead of yours in a search results list. However, last year a federal court upheld Google’s practice of selling placement on the separate sponsored-link’s list, as long as this list was noticeably separate from the standard search results list. The legal line on this issue may be changing, so ask your attorney to watch for the results of these cases if you are interested in the outcome.

There have never been so many media, used in so many ways, to affect your customer’s ability to find your business. If your company holds a valuable mark, you must be creative and diligent to protect it in cyberspace, and keep an eye on the law – it is struggling to catch up.