It’s common practice these days to purchase advertising keywords from search engines such as Google.  Once purchased, these keywords will trigger advertisements for your business.  Say, for example, that you run a pizzeria.  By utilizing the search engine’s context-based marketing tools, you can purchase the keyword “pizza,” which will trigger advertisements for your business each time a browser searches for the term “pizza.”  That advertisement will appear as a “sponsored advertisement” next to the organic results list generated by the search engine.

But what happens when the keyword you purchase consists of the trademark of a competitor?

This happens quite frequently, and there have been several high-profile cases brought in the U.S. and Europe against Google and others over this practice.  Several of these cases have settled, but others are still pending, and the jury is still out regarding the legality of this practice.  At issue is whether the use of a third party’s trademark to generate sponsored advertisements constitutes trademark infringement.  In other words, will consumers be confused into believing that the business featured in a sponsored advertisement is endorsed by, sponsored or otherwise affiliated with the owner of the trademark used as a keyword?

The Second Circuit Court of Appeals recently reversed the dismissal of a trademark infringement complaint against Google on grounds that use of such keywords constituted a “use” of trademark, as that term is defined by statute.  However, the court left open for further review the question of whether the practice created a likelihood of confusion.  Rescue.com v. Google, Inc., 562 F.3d 123 (2d Cir. April 3, 2009).  Not all courts agree, of course.  Moreover, in Europe, the European Court of Justice recently ruled that confusion was unlikely in such cases.  Google France et. al v. Louis Vuitton Malletier and related joined cases, Case Nos. C-236/08, C-237/08 and C-237/09 (September 22, 2009).

It’s also worth noting that both Google and Yahoo have established procedures through which trademark owners can file complaints.  (See, for example, http://adwords.google.com/support/aw/bin/answer.py?hl=en&answer=6118).

As long as the question remains unsettled in the United States, however, the watchword for using third party marks as keywords to trigger advertising is “caution.”

Ideally, the practice should be avoided, at least until U.S. courts rule that the practice is legal.  To the extent you want to move forward, however, you should make sure that the advertisement triggered by the particular keyword does not contain the trademark of a competitor in any manner.  Depending on the precise circumstances, the appearance of a competitor’s trademark in your ad could be found to constitute trademark infringement, for which you can be held liable.

In addition, be prepared to discontinue the advertisement the minute you receive a complaint.  Regardless of whether the practice constitutes trademark infringement, per se, litigation is expensive.  As a practical matter, whatever benefits can be derived from this practice will be heavily outweighed by the costs of having to defend against a trademark infringement claim in court.

Of course, if you are a trademark owner who believes your mark is being improperly used as a keyword to trigger a competitor’s advertisements, you should immediately file a complaint with the relevant search engine that generates the sponsored advertisement and simultaneously notify the competitor of your rights in the mark.

This is a guest post by Cliff Hyra of Hyra IP.  He also has a personal blog with tons of great insights on patents, Patents 101.

What can you do to avoid cyber squatting problems? There’s 3 THINGS that you can do as proactive measures.

1) Register more domains than just the domain that you’re intending primarily to use.

2) Register your business’ trademarks.

3) Monitor your domains and the traffic that you’re receiving to identify patterns that can indicate cyber squatting activity.

Register More Domains – So the first thing you want to do is just register a few additional names when you’re registering the domain that you want to use. Just registering your domain .com is not enough. You want to at least get .net, .org, and probably some common, any kind of common misspellings or typos of that domain name. The cost to register is only about $10 a year. As you’ll hear later, that’s much less than the cost to get a domain back once it’s in a cyber squatter’s hands. And you can kind of scale this up with your web presence. As your site becomes more popular, you may want to expand the scope of names that you’re going to register. And any kind of big corporation, they’ve registered pretty much every imaginable combination, every imaginable misspelling of their domain name. So that’s the first thing you can do.

Register Your Trademarks. Typically a domain name is going to be like a business name or a brand name. It’s going to at least include a trademark that your business uses. And if you want to learn a little bit more about trademarks, there’s plenty of information about it on the internet. I did a podcast about that earlier. But think of them as primarily brand names and so forth. And so you probably should be registering them anyway, but having registered trademarks really makes it a lot easier to get back your domain names if necessary.

Monitor Your Traffic. There are free sites, free tools on the internet that you can use, free or very inexpensive, that will keep track of domains that are typos of your own, and see if they’re getting registered. If you notice them being registered, that may be a sign that your site is becoming popular enough that it’s becoming a target for cyber squatters. And also if you keep track of where the traffic is coming from on your site. Is it coming from other websites? Are those websites typos of your website? They’re probably coming from a cyber squatter’s website. So if you identify those early warning signs, you may be able to still get in and register a bunch of domains before the cyber squatters get to them.

What Happens if Squatters Become and Issue?  Once you find out as some of my clients have, that hundreds of domains have been registered by these random people maybe in the Grand Cayman, some offshore place you have options as well. Until about 10 years ago, your only option was a lawsuit. But that was kind of an untenable situation. It’s so easy to register a domain. There’s so many combinations, so many people out there doing this, that they developed a system for addressing these kinds of issues very inexpensively and very quickly.

Submit Your Complaint to an Arbitration Panel – If you can show that the person is indeed a cyber squatter, that they don’t have any rights to the domain name themselves, that you do have rights to the domain name, and that they registered or are using the domain in bad faith, for example, to take advantage of your popularity, of your good will in order to drive revenue, then you can get that domain transferred to you. Because you have the right to that domain name because you have rights to the trademark that the domain name is based on. And so that’s illegal, it’s unlawful for them to register the domain name. You’re entitled to those domains. And you can get them back by basically submitting a complaint. There’s a certain format and of course an attorney is very highly recommended for this process because while it’s not as complex as a lawsuit, it is highly legal. But the cost is relatively low compared to a lawsuit. The arbitration fee is typically about $1,500. And a lawyer may charge $1,000, $2,000. So you’re talking about only a few thousand dollars to get the domain back. That’s much less than the cost of a lawsuit. And typically these can be resolved within a couple months. Whereas a lawsuit may take years.

And the other advantage of this arbitration option, and that’s known as the Uniform Domain Name Dispute Resolution Policy, that allows you to do that arbitration, is that it kind of changes the leverage as far as negotiation. And so because you have this threat of arbitration, you’re able to negotiate with the cyber squatters and perhaps arrange for them to transfer the domain to you free of charge, or just for covering their expenses in registering their domain.

And of course your last option if neither of those things works for you is to file a lawsuit. And the Anti Cyber Squatting Consumer Protection Act in the United States which passed in 1999 makes it much easier to get jurisdiction over cyber squatters and to hold them responsible in court.

Thank you for watching. To sum up, if cyber squatters have become a problem for you, if you’ve noticed that there are domains that have been registered that are typos of your own domain name that are diverting traffic, you really need to speak to a lawyer about this, and a lawyer who specializes in this area. Most lawyers don’t, because it’s really just too complex to handle by yourself. So I’m Cliff Hyra with Hyra IP. And if you have any questions about this podcast, you can email me at CliffordHyra@HyraIP.com. Or LegalRiver at Podcast@LegalRiver.com. Thanks again.

To reiterate, all views expressed in this presentation are intended only as a general discussion of the issues and should not be regarded as legal advice. For additional details or advice

This is a guest post by Cliff Hyra of Hyra IP.  He also has a personal blog with tons of great insights on patents, Patents 101.

Cyber squatting is a very common problem these days, especially for any business that has a large web presence. And really any business that’s going to have a website that’s important to them should know 3 things.

1. They should know what cyber squatting is
2. What steps they can take to prevent cyber squatting problems
3. What you can do once cyber squatting has already become an issue for you.

So in this podcast, I’m going to talk about the first two of those issues. And then in the next podcast I’ll address what you can do once it’s already become a problem for you.

What is Cyber Squatting?

Cyber squatting has become a big issue now that the internet has obviously become so huge. And what cyber squatting is has evolved over the years. There are  businesses who’s entire business is domain names It’s buying, holding, selling domains. These are well capitalized companies, some with tens of millions of dollars. They have automated programs that go out, they detect what domains are receiving traffic. And then they automatically register those domains in bulk. And they throw up content automatically onto each site. Many of them own hundreds of thousands of sites, and each one may be filled with advertising links, from Google and Google Adwords, or other automated advertising programs. And these domainers, they don’t really care what the domain is, as long as it gets traffic. And so if they can pull in $12 a year in revenue from traffic going through their advertising links, and it costs them $10 to register and host the site, that’s great for them. I mean it’s only a few bucks, but multiply that by hundreds of thousands of domains, and you have yourself a good business. But where it changes from just domaining into cyber squatting is that there’s no real way for them to account for what domains other people have rights in. And so if they register a bunch of domains that other people have rights in, that’s known as cyber squatting.

Why might it be an issue for your business?

Well here’s a common scenario. You decide that you’re going to develop a website. You put a lot of time and money into it. Search engine optimization, Google Adwords, just building and driving traffic to your site. It becomes popular, it becomes very important to your business. And pretty soon you’ll find that hundreds of similar domain names have been registered by cyber squatters. Basically every imaginable typo of your domain name. They’re all going to be registered because they’re all going to be getting substantial traffic as a result of the popularity of your website. And just the fact that people are going to be making mistakes typing in your domain name, ending up at these slight misspellings of your domain name. So if you’re not paying attention, you’re going to find that your customers are being diverted. It may not be a large percentage, but it can be numerically a very large amount of customers who are looking for your site, they’re ending up at a cyber squatter site. And you have no control over the content of the cyber squatter’s site.

They can then redirect to another site. It could be a gambling or pornographic website, or a competitor’s website. But probably the most common thing to do, as I mentioned earlier, is to throw up an automatically generated page just covered in links, sponsored pay per click links. And so the issue with that is that those links that are up there are going to be related to the domain name. So most likely they’re going to be links to your competitors. And they may even be links to your own website. If you advertise with Adwords, Google Adwords, they automatically place your ads on relevant sites that will include these cyber squatter sites. And you’ll be paying to have your own customers sent back to your site. Or even worse, your customers will be distracted, see a link to a competitor’s site, and go there instead. And you will have lost a customer. So the bigger your web presence is, the more business you generate online, the bigger a problem this is.

Hi, this is Lou Levy from Lerman Senter, PLLC in Washington, DC. And I’m back to talk to you again about domain name issues, this time about the domain name selection process. Last time we talked about the domain name administration, what you have to do to maintain your domain names once they’re registered.

I now want to talk to you about the domain name selection process. Obviously this is tied into the trademark clearance process and I’m going to assume for purposes of this presentation that you’ve properly vetted your trademarks, done a clearance search and make sure that your selected trademarks are available, that no third parties are out there using identical or confusingly similar marks. Assuming that’s all in place, what do you need to do to properly select domain names and the various strategies that you can use to fully exploit them.

The first thing in the selection process, maintain confidentiality. This often is, I’ve seen this happen too often especially in close knit communities, people over a drink or at a bar will mention, oh we’re considering launching this product under this mark. And then within a few weeks they realize a competitor has gone and registered the domain name comprised of that trademark that they were considering, or perhaps had already cleared. And now the domain name is registered by a third party. They haven’t used the trademark yet, so don’t have any rights in it per se. And now they’re forced either to not use that domain name or to have to adopt some sort of permutation of it that’s a little bit awkward and that consumers won’t remember as easily. So it’s important when you are in the trademark and domain name selection process, make sure your selection process is confidential and make sure everyone involved is aware and fully aware that the process is confidential, so that there are no leaks to the greatest extent possible you can avoid all leaks.

The next thing you want to do is you want to retain corporate control. When you’re registering the domain names, make sure that the domain name is registered in the name of the company. And make sure that the contact information is to say, admin@companyname.com. Don’t let an employee or a contractor register the domain name on your behalf. It can’t be in their name individually and the contact information can’t be to them personally. It has to be to the company. And this is to ensure that anyone trying to contact you about the domain name contacts the company rather than the individual, but also makes sure that third party doesn’t run away with the domain name and attempt to ransom it back, which happens with alarming frequency. And also you want to make sure that, again this goes back to the domain name administration question, you want to make sure you have one person in control of it in the company and you want to make sure there’s senior management backing them up so that you always know where the passwords are, which registrars the domain names are in, you want to know the account names, the account passwords, the user names, so that senior management can always get into those domain name registrations and quickly change a password if that’s necessary to avoid your employee or ex-employee, which is often the case, from walking away with the domain name or taking control of it in a way that hurts your company.

The next thing you want to do, and this gets a little bit creative, you want to register obvious misspellings of your domain name to avoid third parties taking advantage of it. This is a constant problem in the domain name world, and it’s called typo squatting. Where if you’re Kodak, someone will register K-U-D-A-K or something like that. Someone will just transpose a letter, an X and a Z, often based on just the formation of the keyboard. So for instance, an X and an S can be easily mistyped, or just common errors. If a third party gets that misspelling of your domain name, traffic that would’ve gone to your website goes to their website. Often it’s for pornography or just a portal site with various links and people get their click through revenue streams that way. But the bottom line, it’s traffic that you can’t get. So you want to make sure, without going hog wild on it, you can’t register every permutation. But register the obvious misspellings of your domain name. That’s an important defensive measure you can take. And again the costs are really fairly minimal on the domain name registrations. You could do that, direct all that traffic to your single website, and then you at least have a cone of protection, a zone of defense that prevents third parties from getting — you’re blocking vectors where third parties might be able to get to you and squat on your domain name one way or the other.

And second thing you want to do is register the domain name for an extended period. Don’t just register on a year by year basis. If you’re gonna be — if you have a company name and you’re going to use it, you plan on being around for a while, register it for 10 years. The fact of the matter is the costs are cheap. And when you register for 10 year periods, the costs drop by almost half, by 50%. So register the domain names for a long period of time. And this also strengthens your position when the search engine optimization software programs are looking for domain names, when they look at the strength of a domain name they look at how long it’s been registered for. So that’s something that you should really make sure to do. And it’s very low cost.

Another thing you can consider doing is registering generic or descriptive terms that relate to your website or your company or your service. For instance, if you’re some news in Jersey City, for instance, you might want to register jerseycitynews.com. Maybe your company is named something completely different. But somebody might be typing in the URL bar and they’ll say Jersey City News, the jerseycitynews.com website’s gonna come up, and you’re gonna be right at the top of that list on the first page of that hit list. Alternatively, the same can be said if you register for something like — you’re looking for a music site in Jersey City. You could register jerseycitymusic. Again, your website is going to come up the first thing. So it’s important to register these kind of generic and descriptive marks when you can get them. Which again, all these can be directed to your website. That’s more eyeballs and more click throughs and more advertising revenue for your website. And also simply more consumers and people seeing your website.

Another thing you can do is look at some of the auction sites that are out there. And there a lot of domain name auction sites. ‘Cause often they list domain names, actually for a fairly cheap price. On a recent search I once did I found restaurantsaustin.com. Well if you own a restaurant in Austin, Texas, you want to register this domain name, restaurantaustin.com. You can then link it to your website. You’re gonna capture all of that traffic. And you could also, an ancillary benefit of perusing these auction sites, it’s that you can often come on a cool, simply a cool, unique, distinctive domain name that’s just out there floating around that maybe you can parlay into something. I just saw one called cooluniverse.com. I thought this was a great domain. And if I had the time, I would set up either some kind of, sell some, I don’t know, odd product, or maybe a kids website about weird things in science or something, cooluniverse.com. You could find these things, you could purchase them, you could exploit them. You gotta be thinking creatively about how best to utilize the resources out there and how best to get a domain name.

In sum, you need to be very careful about your domain name process. Maintain your confidentiality. Make sure you register generic and descriptive terms. Make sure you have very clear control of the domain name in house so that you know where your domain names are at any time.

If you have any questions about this, please call me or please email me at Llevy@LermanSenter.com. Thanks very much for your attention.

Thanks for listening to this edition of the Legal River podcast. If you have a business law question you would like to see answered in a podcast, please email us at Podcast@LegalRiver.com. To reiterate, all views expressed in this presentation are intended only as a general discussion of the issues and should not be regarded as legal advice. For additional details or advice about a specific situation, please consult legal counsel directly.

Hi, my name is Lou Levy. I’m with Lerman Senter, PLLC in Washington, DC. And the presentation I’m gonna give you today I’m gonna divide into two parts. The first part goes to domain name maintenance issues and administration issues. And the second part of this presentation will go to domain name selection issues.

I want to start with a cautionary tale. As they used to say on Dragnet, ladies and gentlemen the story you’re about to hear is true. In about 2000, a radio station had registered two domain names. One consisting of the station’s call letters plus the word rock. The other consisting of the station’s call letters plus the word rocks, in plural. They only in fact used one of these domain names as a trademark, as a service mark. The other one after two years they inadvertently allowed to expire. Within a couple of months they learned that it had been picked up by a cyber squatter. Now these domain registrations when they expire, they don’t simply evaporate, they fall into the ether and actually fall into the public domain so they can be snapped up. And that’s exactly what happened here. The cyber squatter in this case was also a pornographer. The website linked to a pornographic website featuring a lot of links to other pornographic websites, and of course a lot of pornographic images. People, listeners for the station would stumble on this website and be concerned that the station was somehow involved or associated with this website, or they’d be otherwise scandalized. This caused a lot of embarrassing questions. Of course the station sent out a demand letter. The demand letter wasn’t, it didn’t get the results the domain name registrar, the owner of the domain name had no interest in selling the domain name for a reasonable price. So the domain name — so the client had to retain a lawyer, then filed an administrative complaint. They ultimately won.

But the issue here is not that they won. The issue here is that the whole event, the whole series of events, was unnecessary and could have been avoided had they properly maintained their domain names. And that leads to the crux of this presentation. What do you need to do to properly maintain your domain name registration so they don’t inadvertently expire and so you don’t have the problems that the station had.

Well, the first thing you need to do, and probably the most obvious point, is to make sure you keep records and keep an inventory of all your domain names, even if it’s just a few domain names. And make sure you docket a schedule for their renewal deadlines. You have to keep your renewal deadlines in mind. You could do this electronically, you could use Outlook. You could do it manually, just keep a calendar in your office. Make sure you have reminders. Don’t just rely on the registrar to send you email reminders and don’t just rely on your memory. It’s very important that you avoid a problem where you’re conducting a business and suddenly your domain name expires or you have an unused domain name that suddenly falls into the public domain and ends up being linked to a pornographer, or worse yet a competitor. And this happens a lot. As I mentioned, keep track of your renewal dates.

Also, an important point is assign one person to administer your domain names. Make sure that responsibility is clearly designated. This is usually your IT manager. But it can be also someone in senior management. Make sure whoever it is that there’s some redundancies built in so there are a couple of people who can pick up, at least one person if not two, can pick up if the designated person is unavailable. And often personnel changes, people come and go in companies. And you have to make sure there’s continuity. So make sure you properly designate the responsibility and make sure senior management is aware of who that is so that nothing gets lost, nothing falls through the cracks and your domain name registrations are properly administered.

Another thing to do, especially if you maintain an inventory of domain names, if your company has lots of different products or services and you use a lot of different trademarks, trademarks that are used in those domain names, generate monthly status reports. That’s just a very easy way to keep yourself abreast and every month remind yourself of what’s coming due.

Another important point is to maintain the domain name registrations even if you no longer use them. Companies often change products or services. In the case of broadcast companies they often change programs. Programs run for a couple years then the show will be canceled. But what you want to do is maintain those old registrations even if they’re unused. The costs of doing so are minimal. And what’s more, these domain names are valuable assets. You can sell them at some point. Either you could sell them by auction or someone will simply approach you because they’re interested in them. And you could make a couple bucks on them and at least recover your registration costs, if not do more. ‘Cause sometimes these things can be quite valuable. And people will pay, can pay if you look at the domain name auction sites, will pay a few thousand dollars for these sometimes. So this is something you should note. Don’t let your domain names, even your unused domain names expire. Keep them. They’re assets.

That covers the most salient points regarding the domain name administration process. Thanks very much for your attention. If you have any questions, please email me at Llevy@LermanSenter.com.  Thanks very much.

Thanks for listening to this edition of the Legal River podcast. If you have a business law question you would like to see answered in a podcast, please email us at Podcast@LegalRiver.com. To reiterate, all views expressed in this presentation are intended only as a general discussion of the issues and should not be regarded as legal advice. For additional details or advice about a specific situation, please consult legal counsel directly.

Hi, my name is Lou Levy. I’m with the law firm of Lerman Senter, PLLC, in Washington, D.C. And I’m here to talk to you today about issues concerning posting of user generated content on your websites. I’m sure all of you operate websites and many of you permit users to post information, either audio, video or text material on the websites. That can be a problem if that material infringes the rights of any third party. I’m sure most of you know that YouTube has had many legal problems and been sued for posting of material, posting of content originally filmed by television networks on their website. Smaller website operators face the same issues. So you have to be sure that your users understand that they shouldn’t post that information and you have to make sure you have sufficient notice on your website for who to contact so that material can be taken down, thus enabling you to take advantage of a safe harbor under the law.

Turning first to user obligations, the first thing you need to do is make sure that your terms of use specify that users shouldn’t post information that infringes the rights of the third party, and perhaps more importantly require the users to warrant that any material they’re putting up on your website doesn’t infringe the rights of the third party. That will obligate them by contract to avoid posting infringing material and it gives you another level of protection there in terms of what their obligations are to you as a user of your website.

The second thing you need to do is to post information or to post notice of who a person can contact if their material, the material they own is posted on your website without authorization. That falls under what’s called the Digital Millennium Copyright Act, DMCA safe harbor provision. The safe harbor provision allows you as the website operator to avoid liability provided that you post what’s called a notice and takedown provision, or that you post notice on your website of who you can contact and that you instruct anyone with a complaint to provide sufficient information to allow you to identify the material and to allow you to identify their material. That will give you the right to protect yourself and avoid liability under the safe harbor provision of the DMCA. And again that notice goes in the terms of use along with the obligations and the warranties of the user. It’s very important to have those in your terms of use.

The second thing you need to know concerns material that goes beyond copyright material and what you can do about it. In particular, if users post information that’s discriminatory, hateful, lewd, lascivious, or otherwise objectionable, the question is what are your rights as a website operator to filter that material and to take it down. The fact of the matter is you have rights. And for those of you who are concerned about it, the First Amendment because most of you are not government entities, provided you’re not a government entity, you’re not restricting the First Amendment rights or the free speech of the public, you have the right to take down that information. And you have an immunity and specifically under the Communications Decency Act to take down information, to filter information, and it allows you to voluntarily take information to restrict access or the availability of material that is lewd, lascivious, filthy, excessively violent, harassing, or otherwise objectionable. That’s very broad and that gives you the right to filter out that information. It’s also important in your terms of use that you require users to obligate themselves and undertake by contract to not post information that fits into those categories, and that can include hateful speech and racial and discriminatory speech and things like that. And once you have notice of that, if anyone ever calls to complain about that, which will happen, you can take that information down.

One thing you need to know here is that you can fall out of that safe harbor and you won’t be eligible for it if you’ve done anything to enable the posting of that information on your website. The case in point here is a case out of California dealing with roommates.com. Roommates.com posted information that allowed people to find roommates. Innocent enough, you say, I like to stay up at night, I don’t like to stay up at night, I like my apartment clean, I like my apartment dirty. One of the criteria they listed however dealt with racial preferences. And because they listed a racial preference in their criteria, they were enabling the use of racially discriminatory provisions. It violated the California Fair Housing Statute. That enabling made them liable under the law.

So you have to make sure that you avoid any appearance of facilitating the posting of any kind of objectionable material on your website. And provided that you do that, provided you’re not enabling, you’ll be able to take advantage of the Section 230 safe harbor, which basically is a publisher’s immunity. You’re not responsible for someone else’s content that happens to appear on your website.

If you have any questions about this, I invite you to send me an email at Llevy@LermanSenter.com. Thanks very much for your attention.

Thanks for listening to this edition of the Legal River podcast. If you have a business law question you would like to see answered in a podcast, please email us at Podcast@LegalRiver.com. To reiterate, all views expressed in this presentation are intended only as a general discussion of the issues and should not be regarded as legal advice. For additional details or advice about a specific situation, please consult legal counsel directly.