Ask The Expert: Web 2.0 Legal Risks

Businesses are racing to engage customers, employees and business partners through the use of online social networking tools. As Web 2.0 proliferates, an increasing number of people and businesses are relying primarily on information and communication technologies to engage and interact with each other and the world. If these various stakeholders are to have meaningful interaction, it is important for them to explore the potential of these communication platforms. But legal considerations must be taken into account when strategizing how best to make use of emerging technologies.

This audio Webinar identifies the practical legal risks associated with activities conducted in online participatory spaces. Encompassing Copyright, Privacy, Defamation, Breach of Confidence and other areas of law, the discussion outlines the main considerations that arise when engaging in the online environment. It also examines popular social networking platforms, analysing legal issues specific to their Terms of Use and functionality. This webcast aims to raise awareness of how the legal risks associated with the use of Web 2.0 technologies can be mitigated.

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Whois Proxy Service Can Be Liable For Enabling Cybersquatting

In a recent California case, Solid Host NL v. NameCheap, Inc., (CD Cal, 2009), the Court held that a domain name registrar acting as a Whois proxy service may be held liable as a contributory infringer for a customer's cybersquatting under the Anticybersquatting Consumer Protection Act (ACPA). The question under the ACPA is not whether the registered domain names are likely to be confused with a plaintiff's domain name, but whether they are identical or confusingly similar to a plaintiff's trademark. See 15 U.S.C. § 1125(d)(1)(A)(ii). Contributory liability exists where a party either intentionally induces a third party to infringe a mark or supplies a product or service with actual knowledge that the product or service is being used to infringe the mark.

The decision is important for several reasons. First, the domain tasting trend among brand managers. "Domain tasting" is the practice of registering a domain to test for traffic (brand acceptance/monetization) and deleting it without cost within a grace period. Second, the recent proliferation of "anonymous" domain name registrations and registration services. Third, the pending increase in generic top level domains that will have brand owners scrambling to out-register their competition. Lastly, the case is unusual for an ACPA case. Here, a third-party hacked the domain name owner's registration, and re-registered the domain anonymously in an attempt to re-sell it back to the owner.

The ACPA creates a safe harbor from liability for certain domain registrars. But here, the proxy service did not qualify for the safe harbor because it was not acting as a registrar at the time of the alleged misconduct. In order for a plaintiff to assert a claim of cybersquatting, it must allege facts that demonstrate: (1) a valid trademark entitled to protection; (2) that the subject mark is distinctive or famous; (3) that the defendant's domain name is identical or confusingly similar to the mark; (4) that the defendant used, registered, or trafficked in the domain name; and (5) that defendant did so with a bad-faith intent to profit.

Ordinarily, the cybersquatters themselves are named in ACPA actions . Here, the trademark owner named the proxy service as the defendant because, under the proxy arrangement, the service was listed as the registrant in the Whois directory.

IP Management: Part 1 - IP Audit

Solutions to many current economic challenges “will come from the industries that rely on IP” according to Bush-era Commerce Secretary Carlos Gutierrez. “We have to innovate our way out of the crisis,” he said. Underscoring this with the fact that that major U.S. brands such as Hewlett-Packard and Texas Instruments were born during previous economic downturns.

Failure to identify and document IP and the relationships of those who come into contact with it at the inception of the new venture can lead to serious entanglements down the road. Because so much of the intrinsic value of a new venture is often tied up in the intangible assets of a new business, it is imperative to:

ü Identify your intangible assets early

ü Protect your intangible assets through registration and contract

ü Leverage your intangible assets strategically

Step 1. IP Audit – Locate & Identify your IP!

• Conduct an audit to assess your company’s intellectual property assets as well as your liabilities to identify and reduce risks and capitalize on opportunities. Books and services are available to help you do an IP audit.
• Once a company's intellectual property rights have been identified through an audit, the IP manager should put a program in place to assure that these rights are properly registered and correctly used. This article is intended to serve as a practical guide to the registration and maintenance of IP rights.