Articles
On Your Mark, Get 'Net, Go
Euromoney Trademark Law Practitioners
May 1998
Sommers, Mark
Article
We stand at the brink of a new century, staring squarely at a new marketplace that literally emerged from thin air. The Internet. Few technological developments promise a more profound impact than what the Internet will bring about in vanquishing national boundaries and nurturing a common "world market." This boundary-less marketplace is the venue where trademark owners and practitioners alike must necessarily convene. The code of conduct we collectively forge today will form the "Netiquette" of tomorrow.
"Domain name hijacking" sounded a cold wake-up call to the trademark bar. The ease with which trademarks could be misappropriated and ransomed startled even those battle-tested trademark owners and practitioners accustomed to dealing with all manners of conventional piracy. I recall reading the article Joshua Quittner wrote in the October 1994 issue of Wired Magazine about his registering the "mcdonalds.com" domain. He rhetorically mused about the worth of that name. Its worth aside, the value of his highlighting the issue for the trademark bar was immense, as it sparked a new dimension to our practice. Call it "Trademark Practice and Procedure, Version 2.0."
In the United States, domain name infringement eventually came to fit comfortably within the existing framework of the trademark laws. A domain name may infringe another's trademark, trade name, or even domain name, if the contested domain name creates a likelihood of confusion. A domain name may dilute a famous trademark, if the contested domain name blurs the distinctiveness, or tarnishes the favorable associations, of that trademark.
The more debated issues over domain names concern their "first-come, first-served" assignment and subsequent administration. Hoping to ameliorate the clash between trademark owners and domain name registrants, Network Solutions, Inc. ("NSI")-the company currently responsible for registering and administering domain names under the Top Level Domains (TLDs) ".com", ".net," ".org" and others-established a dispute resolution policy. The NSI policy, along with its many revisions, has since been the subject of criticism and litigation. Seeking to maintain NSI's neutrality towards name disputes, the policy places responsibility for resolving conflicts on the parties and judiciary. The fate of registering and administering TLDs in the future rests with pending multinational proposals directed towards establishing international standards.
As the cyber-marketplace matures, the trademark bar will likely encounter issues even more subtle and insidious. Trademarks became "invisible" and "camouflaged" through "Metatagging" and "Word-stuffing." Meta-tagging embeds the trademark in programming language used to create Web sites. Word-stuffing cloaks the trademark in the Web site by entering it in the same color as the site's background. In both cases, a visitor to the site cannot see the trademarks, but Internet search engines can, thereby steering the visitor to a site unrelated to the trademark searched. Certainly the interests of trademark owners must be measured against the interests of competitors to engage in comparative advertising. But if a Meta-tagger or Word-stuffer uses a trademark to gain commercial advantage by misdirecting business, a trademark violation is likely to tag along.
Given the Worldwide Web's "borderless" face, consumers now shop by computer in all comers of the globe. Controlling the importation of infringing foreign Internet-purchased goods raises the age-old debate over whether trademarks are territorial or universal. Multinational companies with well-orchestrated schemes of regional distribution and discreet country-specific marketing must take note. Gray-market goods may be barred only if substantially and materially different from locally sold trademarked goods. Even more vexing is where the same trademark is owned by different companies in different countries. Stemming the tide of these imports poses an enforcement nightmare and underscores the need for multi-lateral cooperation.
Whether one can sue or be sued in the United States based on Internet activities raises a jurisdictional issue that all trademark owners need to consider. Goods produced and sold from factories around the globe may land in United States courts if marketed on the Internet and found to have been directed to the United States consuming public. With United States "netizens" comprising a sizable chunk of on-line consumers, the prospect of holding an Internet marketer subject to United States personal jurisdiction becomes increasingly likely.
The Internet has spawned an ever-increasing array of intriguing trademark issues that touch upon the world's businesses and judicial systems. There has never been a greater time or greater impetus for the world's trademark laws to seek harmony and keep pace with this new world market.
Copyright © Finnegan, Henderson, Farabow, Garrett & Dunner, LLP. This article is for informational purposes and is not intended to constitute legal advice. This memorandum may be considered advertising under applicable state laws.