Virginia Business Litigation Lawyer Blog

Lawyers around the country have come to learn of the Eastern District of Virginia's legendary "rocket docket." With divisions located in Alexandria, Norfolk, Richmond, and Newport News, Virginia's federal court is known as the most efficient in the country for handling intellectual property cases and complex business litigation. Also known for being friendly to business, trademark owners around the country often look for ways to establish venue in Virginia instead of a location closer to home where cases move at a slower pace. In the context of protecting trademark rights, one such opportunity can be found in the Anticybersquatting Consumer Protection Act.

The ACPA provides for a cause of action against those who register or use a domain name confusingly similar to, or dilutive of, the trademark of another. Enacted in 1999, the ACPA was designed to address the practice of "cybersquatting," which generally involves the practice of registering a domain name containing somebody else's name or trademark with the intention of either profiting from the resulting confusion or of selling the domain name to the less-Internet-savvy trademark owner. You could sue the individual in the jurisdiction of his residence, but what if that person lives in the District of Minnesota, one of the slowest federal courts in the country? Or what if the registrant took steps to shield his identity when registering the domain name and you can't determine whom to sue?

One option available to you is to sue the domain name itself. And because VeriSign--the world's largest registry and operator of the .com and .net top-level domains--is located in Dulles, Virginia, which falls within the jurisdiction of the Eastern District of Virginia, there is a good chance you can bring that action in the Rocket Docket, regardless of where the actual registrant resides.

MetroPark, a fashion clothing store incorporated in Delaware and based in Los Angeles, successfully utilized this procedure in recent weeks and obtained a judgment against metropark.net in Virginia's highly efficient federal court. MetroPark's online store is located at metroparkusa.com. On October 2, 2009, a registrant registered metropark.net and, shortly thereafter, put up a website at that domain advertising clothing and accessories substantially identical to and in direct competition with the goods and services offered by MetroPark.

MetroPark identified the individual as someone with a history of cybersquatting, and who is the current registrant of multiple domain names that mimic famous trademarks of third-parties, such as bankofamericaa.com, dicksportinggood.com, abcnewschicago.com, and officedeppotcom.com. Rather than sue the individual directly, MetroPark sued the domain name itself. The court recognized the validity of this procedure, writing "Pursuant to the Lanham Act, '[t]he owner of a mark may file an in rem civil action against a domain name in the judicial district in which the domain name registrar, domain name registry, or other domain name authority that registered or assigned the domain name is located'" provided that the domain name is violative of the trademark provisions of the Lanham Act.

The Court found that metropark.net was being used in a way likely to cause confusion or mistake, as Internet users looking for MetroPark's site might come across metropark.net and, if they did, would likely to be deceived into believing that the site is affiliated with MetroPark. The ACPA is designed to remedy this very situation. Therefore, the magistrate judge recommended (and the district judge ordered) that VeriSign, the operator of the registry of the metropark.net domain name, transfer the domain name from the current registrar, Moniker Online Services, to a domain registrar of MetroPark's choosing, and that such registrar thereafter register the domain name in MetroPark's name.

Architectural drawings are not entitled to a great deal of protection under the United States copyright laws, but to the extent a drawing contains a creative, original combination or arrangement of spaces and design elements, the work will be entitled to some level of copyright protection against acts of infringement.

In a recent Virginia case, Commonwealth Architects sued Rule Joy Trammell + Rubio, LLC ("Rule Joy") in the Eastern District of Virginia, claiming that Rule Joy infringed its copyright in certain architectural drawings by scanning them to PDF format. Rule Joy moved for summary judgment, taking the position that Commonwealth Architects did own any valid copyright in the architectural drawings and that, even if it did, Rule Joy did not copy any protected elements of the drawings. Judge Henry E. Hudson, relying primarily on Intervest Constr., Inc. v. Canterbury Estate Homes, Inc., 554 F.3d 914 (11th Cir. 2008), held that Commonwealth Architects owned "a thin, but valid, copyright" in its architectural drawings, and denied Rule Joy's motion.

Under the Copyright Act, protected works of authorship include, among other things, "architectural works" under 17 U.S.C. § 102(a)(8). Architectural works are defined as "the design of a building as embodied in any tangible medium of expression, including a building, architectural plans or drawings. The work includes the overall form as well as the arrangement and composition of spaces and elements in the design, but does not include individual standard features," such as common windows or doors or standard space configurations. The court noted that while individual standard features are not copyrightable, an architect's original combination or arrangement of such elements involves a degree of creativity and may very well be copyrightable. Still, the court compared the copyright protection affordable to architectural works to "compilations" and described the level of protection as "necessarily thin."

The court treated the architectural drawings at issue as "derivative works" because they adapted and transformed preexisting hotel drawings into into a "new" design that added apartment living and retail space while retaining the look and feel of the original. Derivative works, like architectural works in general, receive only thin protection in that only the original material contributed by the new author receives copyright protection.

This thin level of protection, however, was sufficient to enable Commonwealth Architects to survive summary judgment, as a reasonable jury could find that Rule Joy's scanning of the drawings to PDF constituted infringement of copyright. The court noted that while much of the drawings may be undeserving of protection, Rule Joy failed to demonstrate, as a matter of law, that every single design choice was unprotectable. "Commonwealth's drawings contain protected expression, albeit thin and constrained," the court held.

Too often, disgruntled departing employees will abuse their employer's computer system on their way out, snooping into coworkers' email accounts, erasing important files, downloading trade secrets or other confidential commercial information, or intentionally infecting computers with viruses. In recent years, the Computer Fraud and Abuse Act (CFAA) has become an important weapon in an employer's arsenal for combating such computer crimes. Civil remedies are available under the CFAA for damage to any "protected computer," which includes any "computer used in interstate or foreign commerce or communication." However, a Virginia court recently clarified that the CFAA will not provide a remedy absent an actual "loss" as defined by the statute.

In Global Policy Partners, LLC, v. Yessin, a plaintiff brought claims against her husband and business partner under the CFAA and the Stored Communications Act (SCA), claiming that he had accessed her work email account in order to review her confidential communications with her divorce lawyer. The court rejected the husband's initial attempts to dismiss the case on the ground that his access to his wife's email was authorized in that he was a co-manager of the couple's business. The court reasoned that because there was no legitimate business reason for the snooping, the access was unauthorized. At the summary judgment stage, however, the court granted summary judgment in his favor because the wife did not introduce sufficient evidence to show she had incurred a $5,000 "loss."

To prevail on a claim brought under the CFAA, a plaintiff must demonstrate that the alleged violation "caused ... loss ... aggregating at least $5,000 in value." 18 U.S.C. Section 1030(c)(4)(A)(i). The CFAA specifically defines four categories of potential loss: "[i] the cost of responding to an offense, [ii] [costs of] conducting a damage assessment, and [iii] [costs of] restoring the data, program, system, or information to its condition prior to the offense, and [iv] any revenue lost, cost incurred, or other consequential damages incurred because of the interruption of service." 18 U.S.C. § 1030(e)(11). According to the Fourth Circuit Court of Appeals, this list "plainly contemplates ... costs incurred as part of the response to a CFAA violation, including the investigation of an offense." A.V. ex rel. Vanderhye v. iParadigms, LLC, 562 F.3d 630, 646 (4th Cir. 2009).

Just because an unauthorized person reads an e-mail, however, does not necessarily mean that he is liable under the CFAA. In order to recover damages under the CFAA, a plaintiff must establish three main facts: (1) A violation of the plaintiff's computer system; (2) costs incurred by the plaintiff due to the violation, and (3) those costs must aggregate to $5,000 or more. 18 U.S.C. § 1030. The court indicated that it would view critically a plaintiff's post hoc claims that a violation "caused" costs to be incurred simply because money was spent subsequent to the violations. Furthermore, 18 U.S.C. § 1030(e)(11) only compensates for "reasonable" costs, so a plaintiff must establish, not only that the defendant's violation caused the plaintiff to suffer costs but that those costs were a reasonably foreseeable result of the violation. The court held that even if a defendant breaks into a plaintiff's computer system and reads email without authority, that would not give the plaintiff a blank check to perform system updates that were not reasonably necessary to restore and re-secure the system.

If a victim of computer fraud can establish a loss, however, the CFAA offers a potentially powerful deterrent in the form of a federal cause of action.

Access Designs, Inc., a company that manufactures TubcuT®, a product that alters regular bathtubs to convert them into walk-in showers, has filed a trademark-infringement suit against The BathWorks Company in federal district court in Charlottesville, Virginia. According to the allegations of the Complaint, two former representatives of Access Designs, Greg and Ellen Murphy, formed BathWorks in Rhode Island and began selling a product similar to TubcuT® and marketing it under the name "Tubcut" or "Tubcuts", creating a likelihood of confusion in the marketplace with respect to the origin of the customized bathtubs.

The suit is based on the provisions of the Lanham Act that govern trademark infringement and unfair competition, 15 U.S.C. §§ 1114 and 1125(a). To win on both allegations, Access Designs must prove three things: (1) that its mark is valid, (2) that The BathWorks Company's use of the mark is unauthorized, and (3) that BathWorks' use of the mark is likely to cause customers to be confused.

Access Designs has a little bit of a head start in that TubcuT® is registered with the Patent and Trademark Office, as registered marks carry a presumption of validity. The key issue in the case is likely to be whether BathWorks is using a mark that is likely to cause confusion among consumers as to the source of the parties' respective products. To determine the likelihood of consumer confusion, courts generally consider factors such as (1) the strength of plaintiff's mark; (2) the relatedness or "proximity" of the parties' goods or services; (3) similarity of the parties' marks; (4) evidence of actual confusion; (5) marketing channels used; (6) the degree of care likely to be exercised by purchasers; (7) the defendant's intent in selecting the mark; and (8) the likelihood of expansion of product lines.

Whether or not Access Designs can prove its allegations at trial remains to be seen.

The Internet has been a boon to business. It brought local economies into the global market, cut down on communications costs, and made accessible information that was once only available through painstaking research. That is not to say, however, that the technology has not had its drawbacks. Towards the end of the 1990's, peer-to-peer file sharing websites became a haven for piracy of software, music, and movies. At first, those perpetrating these crimes were only a small segment of society, but gradually the practice became more widely accepted and piracy became prevalent in nearly every demographic. Various industries took notice and scrambled to fight back. Many are familiar with the Recording Industry Association of America's (RIAA) resort to the courts to sue and force settlements with those who share music over the Internet. While the RIAA pioneered this strategy, many companies are now following suit by filing suit. One such case was filed recently by Saregama India, Ltd., the biggest recording company in India, in the United States District Court for the Eastern District of Virginia.

Saregama discovered that many of its songs, popular both in India and among the Indian population in the United States, are being made available as ringtones on a website called Dishant.com. Saregama alleges that Dishant.com and its owners, Dishant Shah and Meeta Shah, violated Saregama's copyrights because they never bought the rights to these songs nor received approval from Saregama to share the songs as ringtones. Further, Saregama claims that Dishant.com displayed Saregama logos next to the titles of the songs, which would be a trademark violation.

Under the Copyright Act, the right to distribute copies of copyrighted work, or to prepare derivative works based on the copyrighted work, belongs solely to the copyright owner. Under the Act, if Saregama can prove that the materials provided by Dishant.com are identical to or substantially identical to any property owned by Saregama, and that Dishant.com provided those materials without permission, then Saregama's burden will be met. The consequences for a copyright violation can be substantial. If Saregama prevails, it may be entitled to recover any profits Dishant.com made from the use of the songs (or statutory damages up to $150,000 if the infringement was willful), plus reimbursement of its attorneys' fees.

The trademark aspect of Saregama's suit is based on the Lanham Act, the primary source of federal trademark law in the United States. The use of another's trademark in connection with the sale of a product constitutes infringement if it is likely to cause consumer confusion as to the source of the product or as to the sponsorship or approval of the product. In deciding whether consumers are likely to be confused, courts will typically look to a number of factors, including: (1) the strength of the mark; (2) the proximity of the goods; (3) the similarity of the marks; (4) evidence of actual confusion; (5) the similarity of marketing channels used; (6) the degree of caution exercised by the typical purchaser; and (7) the defendant's intent. Trademark violations can be costly as well. Under 15 U.S.C. 1117(a), a successful plaintiff may be entitled to defendant's profits, damages sustained by the plaintiff, and reimbursement of the costs of the action (including reasonable attorneys' fees in "exceptional cases"). Damages may be trebled upon showing of bad faith.

If you own rights to a trademark or copyright that is being infringed by another, don't wait for an industry trade group to bring legal action on your behalf. Consult an intellectual property attorney and find out whether action is needed to protect your business assets.

Last Friday, the Court of Appeals for the Federal Circuit threw out a jury verdict against Acushnet Company and vacated a permanent injunction that had prevented it from selling the Titleist Pro V1 line of golf balls that Acushnet had introduced to the market in 2000. The court ordered a new trial because the jury had reached a verdict that was impossible to interpret due to internal inconsistencies. The trial court had found the confusing verdict to be "harmless," but the Federal Circuit disagreed and held that the only way to resolve the inconsistency was to order a new trial.

Acushnet had argued that patents for the golf balls, owned by Callaway Golf Company, were invalid due to patent doctrines known as "obviousness" and "anticipation." The requirement that a patent be nonobvious generally means that the differences between the patented invention and the prior art must amount to more than a mere rearrangement of prior art elements with each element predictably performing its same function in the new combination, as viewed from the standpoint of one with ordinary skill in the field. Similarly, a patent will be void for "anticipation" if a single, prior art document decribes every element of the claimed invention, such that a person of ordinary skill in the art could practice the invention "without undue experimentation." In other words, Acushnet essentially argued that Callaway's golf-ball patents were nothing special because any competent manufacturer could have come up with the idea simply by reviewing existing golf-ball-related patents.

In reviewing a particular independent claim of the relevant patent, the jury found that it was nonobvious and valid. However, the jury also found that one of its dependent claims to be invalid for obviousness. This finding, the court held, was incomprehensible: "A broader independent claim cannot be nonobvious where a dependent claim stemming from that independent claim is invalid for obviousness." (See Opinion at 21-22, quoting Ormco Corp. v. Align Tech., Inc., 498 F.3d 1307, 1319 (Fed. Cir. 2007)).

The appeals court ruled that the inconsistency could not be reconciled because there was evidence submitted at trial that would be sufficient to support either of the two inconsistent verdicts. It therefore ordered an entirely new trial on the issue of obviousness. Whether, given this second opportunity, the jury will be able to comprehend the highly technical evidence, involving how things like low-acid ionomer resins and "Shore D hardness" affect golf ball playability characteristics, remains to be seen.

TiVo won its patent infringement case against EchoStar, DISH, and affiliated companies back in 2006, obtaining a ruling that EchoStar's digital video recorder ("DVR") violated certain claims of U.S. Patent No. 6,233,389, owned by TiVo, and obtaining an injunction against future patent violations.  In response to the ruling, EchoStar developed a supposed "workaround."  On June 2nd, 2009, the court held that the workaround did not cure the infringement.  The court held them in contempt of court for violating the injunction and again ordered them to stop using TiVo's technology.

"Once You Know, You Newegg." That is the slogan and registered trademark of Newegg, a popular online retailer of consumer electronics and high-tech products. Department-store chain Kohl's recently began using a similar tagline: "The More You Know, the More You Kohl's." On May 14th, Newegg filed a trademark-infringement lawsuit in California seeking to enjoin further use of the similar slogan.

A combination of words used in commerce as a slogan is protectable as a trademark if used to identify and distinguish the source of products or services. Use of a registered slogan by others can be prohibited if there is a likelihood of confusion among the consuming public. Newegg's action essentially claims that Newegg has a property interest in the "Once You Know, You Newegg" slogan, which it built up at great expense, and that the slogan has become associated in the minds of consumers with "an unsurpassed shopping experience, rapid delivery, and stellar customer service." According to the lawsuit, Kohl's, having full knowledge of Newegg's trademarks and intending to siphon off some of the goodwill associated therewith, began using a deceptively similar slogan in a manner likely to cause direct financial harm to Newegg.

As with most trademark and unfair competition cases, the big question is going to be whether Newegg can prove a likelihood of confusion. Among the more questionable allegations of the lawsuit are those claiming that Kohl's "attempted to increase traffic to their website by diverting users looking for Newegg's website" and that confused Newegg customers "visit Kohl's website believing it to be Newegg's website." As suggested by the trademarked slogan itself, Newegg believes its customers are intelligent and savvy -- that is why they shop at Newegg. Are these the same people who are going to wind up at Kohl's website when looking for Newegg, and who are going believe, once they have landed at Kohl's site, that they have indeed found Newegg? What kind of customer wouldn't include the term "Newegg" in an online search for Newegg?

Another weakness is the prominent use of the respective companies' primary marks embedded within the slogans, greatly lessening the likelihood of confusion. In other words, while "the more you know" is undoubtedly similar to "once you know," once you reach the operative word in the slogan (Newegg or Kohl's), it's difficult to remain confused about the identity of the retailer.

Still, Newegg may have a legitimate complaint in that consumers may erroneously assume, due to the similarity of the slogans, that Newegg and Kohl's have formed an affiliation. While primarily known for its electronics, Newegg has been branching out and expanding its offerings to household products such as those found in department stores like Kohl's. Newegg's strongest claim, in my view, is not for infringement but for trademark dilution, a theory that would entitle Newegg to an injunction if Kohl's new slogan would blur or tarnish the strength of Newegg's famous slogan. For dilution claims, actual or likely confusion is not required.

 

Back in 1992, a group of Native American activists challenged the validity of the Washington Redskins trademarks on the ground the trademarks were impermissibly disparaging towards their ethnic group.  After scoring early victories before the Patent and Trademark Office and the Trademark Trial and Appeal Board (TTAB), resulting in a temporary cancellation of the marks (which deprived Pro Football of the ability to go after infringers), the U.S. District Court for the District of Columbia sided with the Washington Redskins about six years ago.  The rationale had nothing to do with whether the term "Redskins" is disparaging to Native Americans, but with the equitable defense of "laches."  The Court of Appeals reversed that ruling due to a faulty application of that defense, but the District Court again ruled in favor of Pro Football (the owner of the Redskins trademarks) last year.  The matter was again appealed.  This time, however, the Court of Appeals affirmed the District Court, solidifying the Redskins' victory and the validity of the marks.   

"Laches" is a doctrine which, like a statute of limitations, serves as a defense to legal proceedings when the plaintiff has waited too long before bringing the claim.  It applies where there is (1) lack of diligence by the party against whom the defense is asserted; and (2) prejudice (i.e., harm) to the party asserting the defense.  

The first time the question was presented to the District Court, it applied the laches defense because the TTAB proceeding was not brought until 25 years after the marks were first registered.  The Court of Appeals reversed that ruling because the defense is intended to apply where there has been unjustified delay by a particular person.  One of the plaintiffs was only a year old when the Redskins trademark was first registered.  So on remand, the District Court focused only on whether that particular individual, Mateo Romero, delayed in asserting his rights, beginning the analysis with the date of his eighteenth birthday (the legal age of majority).  From that perspective, the alleged delay was not 25 years but less than 8.

Still, the District Court found that Mr. Romero should not have waited nearly eight years before asserting that the term "Redskins" is disparaging towards Native Americans and that the delay caused prejudice to Pro Football.  In particular, the court reasoned, former Redskins president Edward Bennett Williams had met with various Native American leaders at or around the time the marks were registered (which is the relevant time for determining whether a mark is disparaging towards racial or ethnic groups) to ascertain and consider their views.  He passed away prior to the TTAB proceeding.  Had Mr. Romero made his complaint earlier, Mr. Williams might have been available to testify regarding his knowledge of 1967 attitudes towards the Redskins name.  

The second major reason for the district court's rejection of the trademark challenge was the fact that Pro Football had stepped up its merchandising efforts in recent years, making a huge investment to protect its trademarks.  Had Mr. Romero not "slumbered on his rights," as the equity saying goes, Pro Football likely would not have made these expenditures.

The Court of Appeals, while observing that Mr. Romero's legal position was "not without merit," deferred to the district court's holding, finding no abuse of discretion.  

Is this the end of the saga?  According to Philip J. Mause, one of the activists' attorneys, they are still considering whether to appeal.  

Maryland-based Marriage Savers, Inc., a non-profit marriage counseling service and operator of www.marriagesavers.com, has filed a trademark action in the Eastern District of Virginia against Lovepath International, Inc., another marriage counseling organization, which allegedly has been conducting business using the confusingly similar domain name marriagesaver.com.  As of this writing, www.marriagesaver.com has been taken down.

According to the complaint, Marriage Savers owns the federally registered trademark "MARRIAGE SAVERS" and has used the mark since the early 1990's in connection with a wide variety of products and services, including writing printed materials and publications in the field of marriage, conducting workshops and seminars to community leaders, and offering counseling to couples.  

Lovepath, according to the suit, also offers seminars, books, and online resources geared to marriage counseling and markets them using the name "Marriage Saver."  Marriage Savers contends that Joe Beam, Lovepath's founder and president, is not only familiar with Marriage Savers and its trademarks but has actually been a speaker at its conferences.  

Marriage Savers filed the lawsuit on April 20, 2009, and brings claims of trademark infringement, false designation of origin and false advertising, cybersquatting, and related common-law claims.  It is asking the court to award an injunction to stop the infringing activity and prevent future infringment, to order the destruction of any infringing materials, to order that Lovepath transfer its domain names to Marriage Savers, and to award compensatory, statutory, and punitive damages.

While regrettable that these marriage-counseling services can't seem to exist together in blissful harmony, the case looks like a strong one.  Under 15 U.S.C. § 1114(1), trademark infringement exists where (1) the mark is distinctive and has been used in commerce; (2) the plaintiff is the legal or equitable owner of the mark; and (3) the defendant is using a similar mark which is likely to cause confusion among consumers as to the source of the goods and services.  While one might think Lovepath could escape liability by arguing the MARRIAGE SAVERS mark lacks "distinctiveness," in this particular case, the mark was registered over five years ago and has been used continuously ever since, resulting in "incontestable" status under 15 U.S.C. § 1065.  Once a mark becomes incontestable, it may no longer be attacked for lack of distinctiveness.

On Monday, the company that owns Gatorade (a Pepsi subsidiary) filed suit against Coca-Cola and Energy Brands, accusing them of false advertising and other unfair competition in connection with its two-week advertising campaign for Coke's Powerade ION4 sports drink.

In the advertising campaign, Powerade (which continues to be marketed as "the complete sports drink") was claimed to be superior to Gatorade (identified, by comparison, as an "incomplete" sports drink) due to Powerade's inclusion of trace amounts of two electrolytes, calcium and magnesium.  According to the lawsuit, no evidence exists to suggest that the addition of these two minerals--especially in such tiny quantities--provides any nutritional or physiological benefits.  Pepsi says Coke isn't playing fair when it displays a photo of a Gatorade bottle lopped in half alongside the slogan, "Don't settle for an incomplete sports drink."  In legal terms, it claims Coke is guilty of "false advertising, trademark dilution, deceptive acts and practices, injury to business reputation and unfair competition."

The Lanham Act, on which all of Pepsi's claims are based in various forms, prohibits misleading advertisements.  Specifically, Section 43(a) of the Lanham Act, found at 15 U.S.C.A. § 1125, makes a defendant liable for false advertising where all of the following conditions are met: (1) the defendant made a misrepresentation in commercial advertising or promotion concerning goods, services, or commercial activities; (2) the misrepresentation actually deceived or tended to deceive its recipients; (3) the misrepresentation was likely to influence purchasing decisions; (4) the misrepresentation injured or was likely to injure the plaintiff; and (5) the misrepresentation was made in commerce.

As the trial moves forward, the key issues are going to be whether the statements in Coke's advertising were actually false and whether labeling Gatorade an "incomplete sports drink" tends to deceive consumers and/or influence purchasing decisions. 

Apparently there are still some people who think they are being clever by registering domain names confusingly similar to trademarks or domains used by existing companies, hoping to capitalize on the confusion.  And what better target than Citibank, a giant company with an easily misspelled name!  Judge Hilton of the Eastern District of Virginia, who is well versed in intellectual property issues, decided to teach a lesson to such a schemer in the case of Citigroup, Inc. v. Shui, Civil Action No. 08-0727, on February 24, 2009.

The Defendant, Chen Bao Shui, thought it would be a good idea to register CITYBANK.ORG and use it to market financial services.  When visitors would go to his site, they would see links to, among other things, "Citibank Student" and "Citibank Visa."  Clicking on such an option would not take the visitor to Citigroup, of course, but to another citybank.org page or to a third-party vendor who would pay the Defendant for each click-through.  In other words, the Defendant's plan was to earn money by confusing customers into believing they were dealing with Citigroup when they were dealing with an unrelated, unaffiliated entity.

This is exactly the sort of activity prohibited by the Anticybersquatting Consumer Protection Act, found at 15 U.S.C. 1125(d) (the "ACPA").  A violation of the ACPA exists where (1) a defendant has a "bad-faith intent" to profit from using the domain name; and (2) the domain name at issue is identical or confusingly similar to the plaintiff's distinctive or famous trademark.

Judge Hilton had no trouble finding that Mr. Shui (or is it Mr. Chen?) violated the ACPA.  Granting summary judgment for Citigroup, he found that there was no genuine dispute as to any material fact and that Citigroup was entitled to judgment as a matter of law (i.e., without having to conduct a trial).  Because it was such a clear case, the court awarded $100,000 in statutory damages, plus reimbursement of attorneys' fees.

Trademark owners take note: whether or not you participate in Google's Adwords program to advertise your business, your competitors may be using your trademark as a keyword in promoting their competing business.  Google not only allows this potentially infringing practice, it encourages it!  The company actively and openly sells competitors' trademarks to advertisers seeking to divert potential customers to the advertisers' websites.

It remains to be seen, however, how long the courts will permit this practice to continue.  On April 3, 2009, a federal appeals court sitting in New York decided to allow a case to go forward in which a computer-repair company called Rescuecom sued Google for trademark infringement.  The case is Rescuecom Corp. v. Google, Inc., Case No. 06-4881 (2d Cir.).

The complaint involves two of Google's programs used in Internet advertising: AdWords and Keyword Suggestion Tool.  With AdWords, advertisers purchase keywords relevant to their business.  When a purchased keyword is used in a Google search, the advertiser's ad and link appear on the search results page, either in the right margin or in a horizontal band immediately above the relevance-based (i.e., non-sponsored) search results.  The Keyword Suggestion Tool recommends keywords to advertisers.  Among its recommendations might be the trademark owned by the advertiser's competitor.

According to Rescuecom, certain of its competitors took the advice of Google's Keyword Suggestion Tool and purchased the Rescuecom trademark as a keyword for use in the AdWords program.  The result, it claims, is that a Google search for "Rescuecom" would result in its competitors' advertisements appearing on the results page in a manner that might cause the searcher to mistakenly believe the competitor's product or service was sponsored by, endorsed by, or otherwise affiliated with Rescuecom.

The trial court had thrown out the case, accepting Google's argument that inclusion of a trademark in an internal computer directory did not constitute a "use in commerce" within the meaning of Section 45 of the Lanham Act.  The Court of Appeals for the Second Circuit, however, vacated the trial court's ruling and ordered that the case be permitted to proceed, finding that the practice of displaying, offering for sale, and selling Rescuecom's trademark to its competitors qualifies as a "use in commerce" within the meaning of the trademark statute.

The Court was careful to point out, however, that it had "no idea" whether Google violated the Lanham Act.  (As I often advise my clients, proving trademark infringement requires more than merely use of another's trademark in commerce; the Act requires unauthorized use in a manner "likely to cause confusion...as to the origin, sponsorship, or approval" of goods or services. See 15 U.S.C. 1125(a)).  What the court did hold is that Rescuecom should be permitted an opportunity to prove its allegations in court.

A trademark is a type of intellectual property that generally consists of a distinctive sign or indicator used to identify the originating source of the products associated with the trademark, so that consumers can distinguish the trademark owner's products from those originating from other sources.  Section 45 of the Trademark Act defines the term "trademark" as "any word, name, symbol, or device, or any combination thereof-

(1) used by a person, or

(2) which a person has a bona fide intention to use in commerce and applies to register on the principal register...,

to identify and distinguish his or her goods, including a unique product, from those manufactured or sold by others and to indicate the source of the goods, even if that source is unknown."  See 15 U.S.C. §1127.  An example of a "word" mark would be TOSHIBA.  There are also design marks, like Nike's instantly recognizable Swoosh.  Even a sound can constitute a trademark (for example, NBC's "ding, dong, ding" chimes).  If you own a trademark, no one else can use it if their use would confuse consumers.  Trademarks are identified in commerce by the symbols ™ (indicating that the trademark has not been registered) and ® (for registered trademarks). 

While registration of trademarks is not required, owners of registered trademarks may commence legal proceedings for trademark infringement to prevent the unauthorized use of that trademark. Unregistered trademarks, known as "common law" trademarks, may also be enforced in court, but generally only within the geographical area within which it has been used or will be used.  A federally registered trademark, on the other hand, provides nationwide protection.  

The term "trademark" technically only applies when the product identified by the mark is a good.  When the mark is applied to identify a service, it is known as a "service mark."  Another similar term is "trade dress," which applies to a product's total image and overall appearance. 

Unlike patents, another form of intellectual property, trademarks can be renewed forever as long as they continue to be used in commerce.