By Jere M. Webb Copyright 1996 Jere M. Webb
Cyberspace is an uncertain milieu for application of traditional legal
principles. One must struggle to fit familiar intellectual property law
concepts into the ethereal realm of electronic communications. This is
particularly true for trademark law, which has been the source of some
of the first concrete legal disputes to come out of the on-line world.
This situation reminds one somewhat of the widespread advent of computer
software 15 years or so ago and the resulting struggle to apply
traditional intellectual property law principles to software. Although
the legal war is still raging about whether there should be a special
form of copyright protection for software, whether software should be
patentable, whether shrink wrap license agreements are enforceable, and
whether copying software for purposes of reverse engineering or for
support or modification is permissible, we now have a relatively
predictable set of rules that govern the software world. It will be
interesting to see if the same thing happens with the legal issues
raised by the Information Superhighway.
II. EXPANSION OF THE INTERNET
One of the problems has been the simple fact of incredibly rapid
expansion of on-line communications. As little as two years ago the
word "Internet" was an unknown or vague concept to most Americans. Now
everyone is clamoring to get on the Net. Law firms are putting up home
pages, Fortune 500 companies are changing their marketing plans to allow
for advertising and distribution on the Internet, and new businesses are
springing up to serve the special needs of the cyberworld as Internet
access companies, consultants, marketing companies, and a variety of
other service providers.
In this climate it is not surprising that legal disputes are beginning
to arise and are creating challenges for lawyers and courts.
III. THE WHITE PAPER ON THE NATIONAL INFORMATION INFRASTRUCTURE
In September 1995 the Clinton Administration published a lengthy report
on the legal aspects of the Information Superhighway. Referred to as
the White Paper, its official title is "Intellectual Property and The
National Information Infrastructure: The Report of the Working Group on
Intellectual Property Rights." This is a very good starting point and
resource for identification and analysis of intellectual property issues
raised by the Internet.
IV. TRADEMARKS IN CYBERSPACE
A trademark is a name, word, symbol, or device used by a manufacturer of
goods or a supplier of services to designate products sold and to
distinguish them from goods or services sold by others. In the case of
goods, the mark must be affixed to the goods, or to packaging or point
of sales displays. In the case of services, the mark must be used so as
to designate the services, usually in advertising referring to the
services. This is known as "trademark use."
A. TRADEMARK USE
The problem with trademarks on the Internet often is whether trademark
use has occurred. In the "real" world, you can slap a label on a
product or put a sign on a building, but in the on-line context, the use
of the trademark may be as ephemeral as a momentary appearance on a
Is this enough? The answer is probably it is, at least in many
instances. The Trademark Trial and Appeal Board has, for instance,
recently upheld registration of a mark for "data transmission services
accessed by a computer terminal" and has accepted as evidence of the
mark a printout of the mark as it appeared on the computer screen during
transmission. See In re Multiplex, Inc., 23 USPQ2d (BNA) 1315 (TTAB
1995). The fact that a mark does not appear in more traditional forms
should not necessarily affect protection.
A similar issue exists on the infringement front. If someone copies a
trademark onto an electronic bulletin board, is this an act of
infringement or unfair competition? Again, the answer is that this
probably can constitute infringement, at least if there is a likelihood
of customer confusion as to source or sponsorship.
In Playboy Enterprises v. Frena, 839 F Supp 1552 (MD Fla 1993), the
court found trademark infringement when a subscription computer bulletin
board owner distributed Playboy photographs owned by Playboy
Enterprises, Inc., that contained the "PLAYBOY" and "PLAYMATE"
trademarks. The court also found unfair competition and violation of
section 43(a) of the Lanham Act based upon the bulletin board owner
obliterating some Playboy trademarks and putting its advertisement on
Playboy photographs. The court found that these acts made it appear
that Playboy had authorized use of the photographs on the bulletin
Similarly, in Sega Enterprises, Ltd. v. Maphia, 857 F Supp 679 (ND Cal
1994), the court enjoined a computer bulletin board owner, based on
copyright and trademark infringement, from uploading and downloading
unauthorized copies of Sega's video games. Sega's trademarks appeared
on the copied games and on file descriptions on the bulletin board.
V. THE DOMAIN NAMES DISPUTES
To exist on the Internet, you must have an address, called a "domain
name" (such as "stoel.com" for the author's firm). The ".com" suffix
denotes commercial entities. Other suffixes in use are ".org" for
nonprofit organizations, ".edu" for educational institutions, ".mil" for
the military, ".gov" for government agencies, and ".net" for
associations. For instance, the U.S. Patent and Trademark Office's home
page is found at "uspto.gov."
Domain names are issued on a first-come, first-serve basis by Network
Solutions, Inc. of Hearndon, Virginia, under an agreement with the
National Science Foundation, as part of the Internet National
Information Center ("InterNic"). InterNic does not check to see if
domain names are already registered as trademarks or are owned by other
parties. If the exact name is not already in use as a domain name, you
may register under that name.
This has led to a number of well-publicized disputes over domain names.
For instance, Sprint Communications Corporation decided to rattle the
cage of its arch competitor, MCI Telecommunications, by registering
"mci.com." MCI now has the name back, but Sprint's gambit undoubtedly
raised some eyebrows at MCI.
A couple of months ago InterNic assigned "homeimprovement.com" to a
person in Minnesota who has nothing to do with the Emmy award-winning
television program, "Home Improvement."
In a more widely publicized case, which resulted in a lawsuit, an MTV VJ
registered "mtv.com" as his domain name, while still employed by MTV,
and continued to use it following his on-the-air resignation. The
resulting case, MTV v. Adam Curry, eventually settled, and MTV now has
its domain name back.
Similarly, in Kaplan Educational Centers v. The Princeton Review, The
Princeton Review, a provider of training for standardized tests,
registered "kaplan.com," which resulted in a lawsuit by its competitor
Kaplan Education Centers. According to Mark Radcliffe, the parties
stipulated to arbitration, and the arbitrator awarded the domain name to
Kaplan. See Radcliffe, The Law of Cyberspace for Nonlawyers, published
on the World Wide Web at Gray, Cary, Ware & Freidenrich's home page,
Other reported domain name battles include those involving
"cocacola.com," "nasdaq.com," and a case involving a writer for Wired
magazine, who registered "mcdonalds.com" as part of an article he wrote
for the magazine.
On February 5, 1996 Judge William Dwyer, a federal district court judge
for the Western District of Washington, rendered what may be the first
court ruling on domain names. The court issued a preliminary injunction
in favor of Hasbro, Inc. against use of the domain name "candyland.com"
by an Internet adult entertainment site operated by defendant Internet
Entertainment Group, Ltd. Hasbro was protecting the name of its
children's game "CANDY LAND." The court ordered IEG to remove all
content from the "candyland.com" site and allowed the company to post a
forwarding address for 90 days. See Hasbro, Inc. v. Internet
Entertainment Group, Ltd., C96-0130.
If you are looking for entertainment, go to The 'Lectric Law Library's
home page "lectlaw.com" and read the posted correspondence about the
dispute between the owner of the domain name "inter-law.com" and a
Seattle law firm representing Interlaw, Ltd., a law firm network. The
exchange reveals that anyone who has humor to wield and nothing to lose
can always get the best of sober lawyers.
Mark Radcliffe has described the legal issue raised by domain names as
follows: "[t]he legal status of domain names is uncertain: are they
like trademarks, a source of origin or identify and, thus, capable of
being protected by trademark law, and owned, or are they more like
street addresses and, thus, generally not capable of being protected by
trademark law or owned." Radcliffe, The Law of Cyberspace for
Nonlawyers, supra. In other words, does the use of the name as an
Internet address constitute trademark or trade name use?
There are no published appellate opinions on this issue yet, but there
are several cases pending. The probabilities are that domain names will
be protected under traditional principles, at least in cases where the
name is a famous one, such as "MTV" or "MCDONALD'S" or where the name or
mark is used in connection with sale of products or operation of a
business similar to that of the original owner. In other cases, the
first-come, first-serve principle may operate, which is why so many
companies are rushing to get on the Internet and to register their
company names as domain names.
This rush is quite recent. As of a year ago, only about one-half of the
Fortune 500 companies had registered their company names as domain
names, and almost 15 percent of those names had already been registered
to some unrelated third party.
VI. ADOPTION OF DOMAIN NAME POLICY
Faced with a rapidly increasing number of disputes over domain names,
the official registrar, Network Solutions, Inc., has recently issued a
policy regarding assignment of domain names. Under the policy
applicants must agree to the terms of the policy, as it may be in effect
from time to time, including the obligation to indemnify InterNic from
any claims of trademark infringement or unfair competition. The
applicant must also represent that "the use or registration of the
Domain Name by Applicant does not interfere with or infringe the right
of any third party in any jurisdiction with respect to trademark,
service mark, tradename, company name or any other intellectual property
right." The policy will apply in situations where a claim of ownership
is made supported by proof of ownership of a registered trademark. In
all other cases, a challenge will be settled by court proceedings.
In cases where the complaining party submits proof of a registered
trademark, the domain name registrant will be allowed a reasonable
period of time to transition to a new name before the disputed domain
name is placed "on hold." Once placed on hold, the disputed name may
not be used by anyone until legal rights to the name have been
determined "by a United States court or arbitration panel of the
American Arbitration Association."
The policy can be found at "fftp:\\rs.internic.net\policy\
internic.domainpolicy." Note that the key to taking advantage of the
new policy is having a registered trademark. The U.S. Patent and
Trademark Office has noted that since publication of the NSI policy
statement, the number of applications filed to register domain names as
service marks has greatly increased.
VII. TRADEMARK SEARCHES: CLEARANCE OF DOMAIN NAMES
The normal way to check on the availability of a trademark is to conduct
a trademark search. The largest of the commercial trademark search
firms, Thomson & Thomson in Boston, has recently commenced searching the
Internet register, and it now includes in all search reports a section
on usage of the mark, or something similar, as an Internet domain name.
InterNic will also tell you if a domain name is available, or you can
search yourself. Just go to InterNic's home page,
"http://rs.internic.net," click on "registration services," then on
"whois query form," and then type in the proposed domain name.
VIII. REGISTRATION OF INTERNET DOMAIN NAMES
The U.S. Patent and Trademark Office will register a domain name as a
trademark, provided that the applicant provides evidence that the mark
is used as a trademark and not merely as an on-line address. This
usually means that the applicant must submit specimens showing use of
the mark in advertising, such as use of the mark somewhere in the home
page apart from the address.
A debate is going on within the Trademark Office as to whether on-line
products, such as electronic magazines, constitute goods or services.
The services view seems to be prevailing. However, if a company is
advertising and selling its own goods over the Internet and if it
applies to register for an "Internet site for conducting business and
taking orders for widgets," the Trademark Office will reject the
application because selling your own goods is not considered a service.
It is only if the company is selling the goods of others that the
Trademark Office would accept a description like "electronic retailing
in the field of widgets via computer accessible by means of a global
computer network," which would come under miscellaneous services in
For a discussion of registration of domain names as trademarks, see
"Internet Domain Names and the U.S. PTO: An Interview," Client Times,
Thomson & Thomson (Oct. 1995), available on the World Wide Web at
IX. FEDERAL TRADEMARK DILUTION ACT
On January 16, 1996, President Clinton signed a new federal law, the
Federal Trademark Dilution Act of 1995, which became effective on that
date. The new law protects "famous" trademarks against "dilution of
distinctiveness." "Dilution" is defined as "the lessening of the
capacity of a famous mark to identify and distinguish goods or services,
regardless of the presence or absence of (1) competition between the
owner of the famous mark and other parties, or (2) likelihood of
confusion, mistake, or deception." An example would be use of the mark
"Rolls Royce" as a trademark for sale of refrigerators, or the use of
"Kodak" to sell bicycles.
Traditional trademark principles have protected trademarks against other
uses of the same or similar mark only under circumstances where there is
a "likelihood of customer confusion." Normally this would exist only
where the allegedly infringing mark was used on the same or similar
goods or services. Use of one's trademark by another party on unrelated
goods or services generally would not constitute trademark infringement.
In fact, use of the identical mark on a wide variety of goods and
services is relatively common, particularly for descriptive or
The new federal law will have a big impact on domain name disputes. Up
until now the biggest problem for claimants in these cases has been the
difficulty of proving "likelihood of customer confusion," particularly
where the domain name was used in connection with unrelated goods or
services. This has been the situation in most domain name disputes.
Now, such trademark owners, at least if their marks are "famous," can
make a claim under the new dilution law. The new law was the basis for
the preliminary injunction issued by Judge Dwyer in the Hasbro case,
The law will be of great interest both to companies whose marks are
arguably "famous" and to companies who are using a trademark that is
also in use by other companies on unrelated goods or services.
Trademark owners in either category may want to take immediate action to
take advantage of the new law.
Owners of famous marks may want to take advantage of the provisions of
the new law to halt use of their mark, or something similar, by others
on noncompetitive products. Such an owner is entitled "to an injunction
against another person's commercial use in commerce of a mark or trade
name, if such use begins after the mark has become famous and causes
dilution of the distinctive quality of the mark. Recovery of dilution
damages is available in cases where the defendant 'willfully intended to
trade on the owner's reputation or to cause dilution of the famous
The new law may be of even more widespread interest to those trademark
owners who have adopted a trademark which was at the time of adoption
already in use by other parties on unrelated goods or services. This is
a very common situation, particularly for marks which constitute a
common English language word (as opposed to a coined or fanciful word
such as "Kodak" or "Exxon"). For instance, marks like "Premier,"
"Advantage," and "Allied" are in use on dozens, if not hundreds, of
products. Until now, owners of such marks have been at risk to have the
use of their trademarks enjoined under state antidilution statutes
adopted by about one-third of the states. Most of these state statutes
do not limit protection against dilution to "famous" marks, thereby
creating great uncertainty in those situations where more than one party
is using the same or a similar mark, albeit on unrelated goods or
Congress has acted to eliminate this uncertainty through the new federal
law. The new law preempts any state statutory or common law dilution
claim. However, the preemption is only available if the trademark owner
has registered its mark with the U.S. Patent and Trademark Office.
Note that under both the new dilution law and the new domain name policy
discussed above having a registered trademark is the key to protection.
These two developments will undoubtedly cause a significant increase in
applications to register trademarks.
In domain name disputes where the new dilution law (or similar state
"antidilution" statutes) does not apply, courts will have to apply
traditional trademark principles in a new context. This will mean
determining whether a domain name is more like a post office address or
more like a brand name; that is, determining whether use of a domain
name constitutes trademark use. If the answer is "yes," courts will
need to determine whether the test for infringement, creation of
"likelihood of customer confusion," is satisfied in the particular case.
Until there are more precedents to rely upon, the outcome of these cases
is likely to be subject to significant uncertainties.
Interesting times are ahead as lawyers and courts attempt to apply
traditional trademark principles to the unique world of on-line
Mr. Webb is a graduate of Stanford Univ and the Univ of Chicago Law
School. He is a partner in Stoel Rives in its Portland office. His
practice focuses on intellectual property and distribution law. Mr.
Webb is a frequent CLE speaker, author, and program planner. He is
editor of the Oregon State Bar's five-volume work Advising Oregon
Businesses, is a former chair of the Oregon State Bar's CLE Committee,
and a former member of the Bar's Board of Governors.
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