CHAPTER 11
The Internet
PROTECTING BUSINESS PROPERTY
The Internet’s popularity has raised significant questions regarding the extent of legal and intellectual property protection in cyberspace. One of the earliest cases involved the Church of Scientology and raised the question of whether US copyright laws and state trade secret laws are enforceable in cyberspace. In that case, several former church members were sued for posting copyrighted material online that they had received in confidence.
The court held that these traditional forms of intellectual property protection were, indeed, applicable in cyberspace. In addition, it was held that the Internet service provider (ISP) could also be exposed to liability for merely permitting the infringing material to appear online. As elsewhere, one who facilitates or aids in the commission of an infringing act may be liable as a contributory infringer. Congress later changed this situation for ISPs who do not have control over the content of the material posted.
The Church of Scientology also claimed that the wrongdoers misappropriated the church’s trade secrets and sought an injunction to have the offending material removed from the Internet. The court rejected this argument, pointing out that once information is posted in cyberspace, it is no longer secret, and the injunction was denied. However, if a protected trade secret is posted on a website in violation of an agreement or in breach of one’s duty to the owner of the protected information, then the act of posting would be wrongful and the perpetrator would likely be liable for the improper activity.
PROTECTING CONSUMER INFORMATION
Consumer protection on the Internet is now regulated by the Federal Trade Commission (FTC). This is a federal agency was created in 1914 for the purpose of protecting individuals from consumer fraud and to promote commerce. The FTC now regulates the Internet for Americans. It prohibits unfair and misleading solicitations from being posted on the web. Employers should comply with the FTC requirements or serious consequences will result. Employees should also comply with the FTC rules, which apply to them because they can also be subjected to serious penalties for violating the FTC rules. It is therefore important for you to be sure that you are aware of the FTC rules with respect to your online activities, and if you have any concerns, you should consult an experienced attorney for assistance.
DOMAIN NAMES
Characterization of website names has also presented some vexing problems. It is unclear whether a domain name is merely an address (uniform resource locator (URL)) used for the purpose of locating the site or whether that name may be characterized as a trademark. In addition, the problem is compounded by the fact that, while there is only one World Wide Web, each trademark is distinguished by the classification of goods or services it covers. Under the federal trademark law, there are thirty-four international classes of goods and twelve international classes of services.
Example: The American Bar Association, commonly referred to as the ABA, wished to register its acronym as its domain name. It was not able to do so, because the American Booksellers Association—also commonly known as the ABA—had already registered www.aba.org.
Domain names were originally registered with Network Solutions. Today, there are a number of different registrars. Competition for domain name registration is fierce. Prices for securing a domain name have become far more competitive. Generally, domain names are registered on a first-come, first-served basis. Many businesses or websites can assist you in obtaining a domain name.
Initially, there were five top-level domain name categories for US-based registrants: .com for commerce; .org for organizations; .gov for government; .mil for military; and .edu for educational institutions. These suffixes were supposed to be made available only to those who qualified for their use. As the availability of popular domain names shrank, it became necessary to create additional opportunities by creating new suffixes, such as .pro for professionals, .biz for businesses, .fm for radio, and the process continues. In fact, the number of suffixes is becoming rather large, though the initial five are still the most popular. In addition to all of the US designators, many other countries have distinctive suffixes, as well, such as .uk for the United Kingdom, .ru for Russia, etc.
Disputes
There are several methods for resolving domain name disputes. These include litigation in federal district court, reliance on the anti-cybersquatting legislation, and the online arbitration process using the procedure established by ICANN. (The Internet Corporation for Assigned Names and Numbers offer numerous resources at its website www.icann.org.) The anti-cybersquatting legislation is intended to prevent so-called cybersquatters from obtaining an inventory of domain name registrations for the purpose of reselling them to those who are likely to have a better right to that name as a URL. A lawyer specializing in online intellectual property issues should be consulted when these issues arise.
WEBSITES
The purpose of a domain name is to attract attention to a website, and today virtually every business and many individuals have their own website. Initially, the creation of a website was quite difficult and only experienced professionals were able to assist with their creation. Today, there are websites such as WordPress, which are available for anyone to create a website, though more complex sites may still need the assistance of professionals. Employers may wish to work with specialists in order to have their sites contain more “bells and whistles.” That specialist can either be hired as an employee or retained as an independent contractor. Employees who are interested in creating their own individual sites can also work with professionals, though it is likely that the professional would only be hired as a consultant. Individuals, on the other hand, will not have to spend a great deal in order to have an appealing site. You should decide whether you wish to create and maintain your own website, or whether you would be willing to enlist the aid of a professional to assist with the creation or maintenance of your site.
This is an extraordinarily dynamic area that evolves and expands on a regular basis. Conducting some online research and determining your objectives are important. Creative individuals may enjoy the challenge involved in developing a spectacular site and maintaining it, though there is a cost involved in either money or time and you will need to determine whether you are willing to invest either or both.
Trademarked Business Names
Generally speaking, obtaining a trademark registration for a business name will also provide leverage in both obtaining and keeping the business name as a domain name. (See Chapter 10 for a more complete discussion of trademarks.) Thus, for example, Nike would likely have success in either obtaining the URL nike.com or in defending that URL against another potential registrant of that domain name because the Nike business name is a registered trademark. As noted in the chapter on trademarks, it is possible today to register trademarks in 105 countries throughout the world pursuant to the Madrid Protocol through the US Patent and Trademark Office. One of the principal reasons for this expanded opportunity to obtain international trademark protection was the expanded use of trademarks in commerce online.
Under some circumstances, using a business name as a domain name may be considered adequate for purposes of trademark registration. A number of cases have dealt with trademark issues in cyberspace. In those cases, the applicability of federal trademark law and the question as to which jurisdiction was proper for purposes of litigating the wrongdoing were considered. While the issues have not been definitively resolved, the trend appears to be in favor of extending trademark laws to cyberspace and holding infringers liable wherever their infringing activity can be accessed.
In a landmark case, an enterprising individual residing in Illinois decided to register a number of popular business names as website domain names. When the business owners who had previously registered those names as trademarks attempted to register their company names as domain names, they were told that they were too late. The entrepreneurial registrant then offered to sell these companies the domain names for their own registered trademarks. The companies filed suit in federal court in California, alleging that the appropriation of the protected trademarks as domain names by one who lacks authority from the trademark owner is an infringement. The court agreed and stated that this outrageous conduct would result in liability.
Framing
A number of other issues have generated Web-based litigation. When Total News, Inc., decided to provide Web surfers with the ability to compare data from several news sources, such as the Washington Post and CNN, problems arose. The other services filed suit, complaining that the visual presentation of their material was framed within the host’s name and that their protected material was, thereby, being retransmitted without their permission. The case was settled, with Total News agreeing to refrain from framing the protected material, and the plaintiffs agreeing to grant Total News licenses to link directly to their sites. Later cases have judicially established that framing is unlawful and can be legally redressed.
IN PLAIN ENGLISH
Framing is a situation in which a website pulls information onto its site from another website by using a link or picture.
Linking
In the Total News case, the question of linking, where one may jump from one site to another by simply clicking on an identifying icon or phrase, was raised but not resolved. More recent cases have established that hyperlinking is not an infringement.
IN PLAIN ENGLISH
A hyperlink is a device in which one can jump from one website to another by clicking on an icon or text
INTERNET ADVERTISING
The Internet has become the most popular and most effective method for advertising today. Historically, advertising was accomplished in magazines, newspapers, radio, or television. Of course, the cost of those forms of advertising was quite high, and the audience was quite limited.
Today, advertising on a business or individual’s own site, or on sites such as Google, Avvo, Craigslist, Angie’s List, or the like, the information is disseminated throughout the world and the cost is minimal and, in some instances, nonexistent. You will have to decide whether you wish to increase your visibility by paying something for the increased exposure or whether you are willing to really rely on your information attracting the attention you desire. Working with an experienced individual can be very helpful in making these decisions.
Key Words
One of the more controversial practices that has occurred in recent years is the sale by search engines, such as Google, of the right to use the name of a competitor for the purpose of deflecting business. Some courts have held that this practice is unlawful passing off, whereas others have condoned it. Thus far the cases have been primarily against the search engines themselves, but it is likely that disgruntled business owners will seek to hold the advertiser liable as well.
Audits
Some intellectual property practitioners suggest that an attorney who has expertise in working with websites be requested to conduct a so-called Internet traffic and Web-content audit. This would include evaluating whether the appropriate permissions to display material have been obtained. For example, if copyrighted material is to be used, has the copyright owner granted permission for the work to be displayed on the web? If testimonials are to be displayed, then it is important to get written permission from the individual providing the testimonial.
Liability Insurance
Internet advertisers also need to determine whether their existing liability insurance covers their activity online. Losses resulting from a crashed website are probably not covered in a traditional policy. Similarly, errors and omissions insurance should be considered for situations where your Web designer creates a site that contains infringing work or defames someone.
International Concerns
Because websites are, by definition, worldwide, it is important to determine whether your site, the content of which is legal in the United States, may subject you to liability elsewhere. For example, comparative advertising is generally permissible and fairly common in the United States. Other countries, such as South Africa, are far more restrictive in what they permit in a comparative advertising spread.
In addition, activities that are legal in the United States can nonetheless subject a website owner to liability abroad.
Example: When Yahoo! permitted auction sales of Nazi memorabilia, it was sued in France by the Union of Jewish Students and the International League Against Racism and Anti-Semitism for violating French law that prohibits such activities. The court was not sympathetic to Yahoo!’s position that it could not technologically isolate France from the rest of the world with respect to its online auctions. In fact, the judge believed the plaintiffs’ expert, who said that technology was available to create such a block. The online auction house was found guilty and fined for its activities in France. Yahoo! then filed suit in the United States for the purpose of preventing enforcement of the judgment.
The problem is clear—one who engages in Internet activity has, by definition, established a worldwide presence and must, therefore, comply with worldwide laws—a difficult process even for multimillion-dollar companies like Yahoo!.
SERVER PROTECTION
One significant risk in maintaining a website is that it may serve as a window to your company’s computer system. There are some safeguards that should be taken in order to prevent improper access and protect a business’s valuable trade secrets.
IN PLAIN ENGLISH
If your business hosts its site on its own server that is networked with your other business computers, hackers could gain access to your entire system and all of your data.
Information you deem to be confidential and sensitive should be encrypted. That is, it should be available only through use of special software. Similarly, your system should always be protected by a password and that word should not be obvious or simple. In addition, it should be changed frequently. More and more systems are using firewalls, which are electronic blocks preventing access to all but those who have the proper key. Many businesses have been created for the purpose of developing and installing computer security devices or software. You should consult with an expert when designing your website in order to take advantage of the latest technology.
The popularity of the World Wide Web has been paralleled by the expanded use of email. Communications within a business are commonplace and efficient. Internal, paperless transmissions of important messages throughout an office or plant help facilitate the day-to-day operations in many businesses. In addition, more and more businesses are developing intranets. These are websites available only to a defined network, such as a company’s employees.
Because of the widespread use of internal email, business handbooks and policy statements should deal with the proper use of email, as well as other related computer issues. For instance, it has been held that repeated transmission of sexually explicit or racially offensive email messages by one employee to another may be deemed harassment and, if not controlled by the employer, may render the employer liable as well.
External use of email is also quite common, enabling business users to communicate quickly with customers, clients, suppliers, and the like. Here, too, security is an issue to consider to make sure that the transmission is safe from uninvited inquisitors. Once again, there are a variety of vehicles available for security, such as encryption.