August 2016

Brand Owners Beware of Domain Name Solicitation Fraud

Takeaway: Educate employees to identify fraudulent domain name solicitors and when in doubt, to contact their legal counsel prior to responding.

In the rise of email scams, trademark owners are receiving false claims that their domain name rights are in jeopardy.

Some of these false claims would result in cybersquatting, which is registering confusingly similar domain names to profit from the goodwill of a brand. Other claims may result in trademark pirating, which is applying for trademarks of well-known brands to profit from the goodwill of those brands.

Fraudulent domain name solicitors conduct their scams by targeting brand owners into thinking that important domain names are in jeopardy of being registered by cybersquatters or competitors, and by claiming they are from an official government agency or some certified registrar, especially one from a different country.

For example:
“Dear Sir or Madam,
We are an agency for registering domain names authorized by Chinese government. Today, our center received an application from [COMPANY XYZ] applying to register [“YOURMARK”] as their brand name and some top-level domain names (.cn .hk, etc). After our careful investigation, we found the main body of domain names is the same as yours. As a professional registrar, we are obligated to inform you of this situation. We are handling the application and we need to confirm whether or not you authorize them to register them. Let me know your answer ASAP so as to resolve this promptly.”

Fraudulent domain name solicitors create a sense of urgency by suggesting that the window of opportunity to protect the mark is closing, causing some brand owners to overzealously respond to protect their mark without consulting legal counsel.  In the best case scenario, the brand owner would only be required to pay a fee to deny the request for (fake) registration. In other cases, the brand owner would be offered to have the solicitor buy the domain name for the brand owner, but of course would never do so.  The worst case scenario would be that the solicitor would be party to cypersquatting or trademark piracy—registering domains that the brand owner was interested in protecting.

The solution is to educate employees to identify such suspicious emails and when in doubt, to contact their legal counsel before responding.  Even if the domain names listed out in the emails are of interest to the brand owners, the brand owners should register such domain names using a normal and vetted domain name registrar.

Google Doesn’t Give Up on Glass

Takeaway: Google is continuing to develop Glass. One new patent application has become public and reveals some minor changes, such as the option of having replacement batteries.

One of Google’s recent patent filings indicates that they may be coming out with a Google Glass Version 2, featuring the option of using batteries, such as AAA, AA, or even 9-volt.

U.S. Patent Application No. 2016/0231572

Furthermore the control panel will be mounted on one of the arms, which will function as a touchpad.  Much of the weight will be shifted to the ends of the arms, which may house components such as the processor, Bluetooth chip,  and other communication devices.  This change will take some weight off of the nose and ears as compared to the previous model.

However, experts are predicting that this version, especially because of the replacement batteries, will not hit the market but  that Google will instead focus on further developing battery technology.

Disney Files Patents for Real-Life Lightsabers in Conjunction with Drones
U.S. Patent No. 2016/0201888

As described in patent application “Audience Interaction Projection System,”  Disney intends to create a live audience experience at its Star Wars Land, wherein audience members can participate in a fight using realistic Lightsabers.

The “particulate matter” air above the audience will be filled with water vapor, condensed water, liquid nitrogen, dust, and theatrical fog.  Some audience members will be provided with faux Lightsabers, which include LEDs to transmit IR light toward drones. Then when an LED is turned out, the saber transmits IR rays towards the drones, which have IR sensors that capture the image of the field of view with a bright spot at the position of the activated LED.  Then the drones project visible light through the “particulate matter” air toward the faux Lightsaber, creating the illusion that the faux Lightsaber has deflected a laser beam.

Some audience members would also be wearing a haptic feedback vest with multiple transducers to provide haptic feedback to their body when “hit” by the “laser beam” from the faux Lightsaber.

This patent application shows Disney’s attempt to create more live-audience interactive attractions with more innovative technologies. Star Wars enthusiasts are definitely looking forward to seeing this attraction come to life.

Olympic Lawyers Protects Trademarks Heavily

Takeaway: The U.S. Olympic Committee (“USOC”) has been sending warning messages to business for tweeting using hashtags #TeamUSA and #Rio2016—the legal conclusion of their liability, if any, is yet to be determined.

For decades, the USOC has been protecting its trademarks relating to the Olympic Games such as  “Rio 2016” and “Sochi 2014,” as well as “Road to Rio” and “Road to Sydney.” Interestingly, because the location of the future games are not set in stone, the USOC had trademarks on “Houston 2012” and “Boston 2024,” even though the latter pulled its bid.

This year, a Minnesota carpet-cleaning company Zerorez filed a declaratory judgment against the USOC requesting that the line in the law regarding public discourse and social media conversations be drawn. The company received a cease and desist letter after sending a series of tweets with wishes to 11 Minnesotans representing the U.S. in Rio.

Some call this type of “marketing” “ambush marketing,” such that trending topics would allow free marketing of sorts.  Under the Olympics’ Rule 40, non-official sponsors are not allowed to use Olympics-related words during the games. This is understandable, given that large corporations spend a lot of money in marketing to be considered the Games “official sponsors” and argue that non-official uses are diluting the brand.

However, the issue regarding hashtags is still one up for debate.  While official sponsors would like to limit non-sponsored uses of Olympic-related online posts, Zerorez argues that  they feel bullied because they “don’t want to pretend [they’re] Olympic sponsors, but [they] do want to be a part of the conversation.”

Cox Communications Found Liable for Illegal Music and Movie Downloads By Its Subscribers

Takeaway: Internet providers may start to crack down on their own customers who are suspected for copyright infringement because the internet providers may be liable for their customers’ infringing actions.

Earlier this month, a federal judge held that Cox Communications liable to BMG, the music group, for $25 million.  BMG has been using a third-party company called Rightscorp to monitor for file-sharing and then notify the respective internet providers with the expectation that Cox would then notify the customers.

Instead, BMG was able to show that Cox used various technical means to avoid notifying its customers and therefore was held liable. The court ruled that Cox not only knew that its users were illegally downloading copyrighted content, but also took proactive actions that contributed to ongoing illegal downloads.

Currently, many Internet providers have established policies that give users a number of strikes before cutting off their access, allowing a level of insulation from direct court action because they were eligible for the legal “safe harbor.” However, because Cox didn’t act aggressively enough based on the circumstances, it was not eligible to qualify for safe harbor protection.

Other Internet providers should be wary of their procedural notification process relating to contacting users that may be involved in copyright infringement.  Furthermore, this holding raises questions as to what else Internet providers should be liable for beyond copyright and may lead to a larger shift of burden onto the Internet providers as they monitor and control customer actions.

TTAB Holds Not All Co-Existence Consent Agreements Overcome Likelihood of Confusion

In a recent case, In re Bay State Brewing Company, Inc., the United States Patent and Trademark Office’s (“USPTO”) Trademark Trial and Appeal Board (“TTAB”) issued a precedential decision that affirmed that there was a likelihood of confusion, even though the parties at issue had entered into a consent agreement.

The applicant, Bay State Brewing Company, had led an intent-to-use-based trademark application for the mark Time Traveler Blonde in standard characters with “blonde” disclaimed and covering beer.

The USPTO had refused registration, claiming a likelihood of confusion with a registration for the mark Time Traveler, also in standard characters and covering beer, ale and lager. The applicant appealed the refusal, conceding that there is a likelihood of confusion between the marks but asserting that its mark should be registered because it had entered into a consent agreement with the owner of the cited Time Traveler registration.

The TTAB held that “there is no per se rule that a consent, whatever its terms, will always tip the balance to finding no likelihood of confusion, and it therefore follows that the content of each agreement must be examined.”

Looking at the consent agreement submitted by the applicant with an express acknowledgement of the great weight that such agreements are entitled, the TTAB found that the consent agreement was outweighed by the other relevant likelihood of confusion factors, namely, that the marks are virtually identical, as are the goods, purchasers and channels of trade, and that the products are typically subject to impulse purchases.

The TTAB’s decision appears to have been influenced by the fact that certain of the agreed upon limitations in the consent agreement, namely, with respect to geographic restrictions and labeling requirements, were not reflected in the trademark filings and, therefore, would not be reflected in any subsequently issued certificate of registration. For example, although the consent agreement contained geographical limitations on the applicant, the registrant was not similarly confined, the result being that there would still be overlapping geographical areas in which the parties sold their respective products. Similarly, the undertaking with respect to the appearance of the mark on the bottle label was not consistent with the broad protection afforded a registration for a mark in standard characters.

Therefore, the TTAB ruled that the consent agreement submitted “does not comprise the type of agreement that is properly designed to avoid confusion and does not fully contemplate all reasonable circumstances in which the marks may be used by consumers calling for the goods.” This decision is instructional because it reminds applicants that they may not be able to overcome a likelihood of confusion refusal even if they have secured a consent to register from the owner of the cited mark, as the TTAB is not obligated to accept a consent agreement in all situations. The decision also suggests that it may be appropriate or advisable to add express limitations to an application if that is the basis upon which the consent is provided by another party.

The Federal Bar Association Reminds All Attorneys to Join

The Federal Bar Association comprises Federal Judicial Officers and attorneys who practice in federal court. Membership and participation affords attorneys great access to federal court news and practices, as well as an opportunity to interact with our Federal Judicial Officers.  Our Managing Partner, Dan Cislo, Esq., has been on the Board of Directors for the Los Angeles Chapter for over a decade and is a firm supporter of our Central District Federal Court of California.

If you are interested in becoming a member of the Federal Bar Association, you can find more information at http://www.fedbar.org/Membership/Membership-Categories.