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NEW DOMAIN REGISTRY MAY RAISE SOME EYEBROWS: Are You Ready to have your Trade-mark X-Rated?

The launch of each new domain registry causes concern for businesses as they seek to protect their trade-marks on the Internet. The new .xxx domain name registry launching this fall targets the adult entertainment industry and so raises some unique concerns for businesses – including those that are not involved in the adult entertainment industry.

To protect their good name in the marketplace, many businesses will want to avoid any confusion on the Internet between their business and another business marketing adult entertainment products and services. On the other hand, businesses engaged in the adult entertainment industry will want to ensure that a third party does not try to trade on their goodwill by registering a domain name on the .xxx domain registry that is similar to its established trade-marks or domain names. Fortunately, both concerns can be proactively addressed during the “sunrise period” for this new domain registry.

The sunrise period for the .xxx domain registry opens September 7, 2011 and closes October 28, 2011. During the sunrise period, businesses may either opt-in or opt-out of having their trade-marks registered on the .xxx domain registry.

Businesses already engaged in the adult entertainment industry may opt-in to the registry by filing an application under the Sunrise A option.
This option is available to businesses which:
a. have a subsisting nationally registered trade-mark in a jurisdiction where they carry on business; or
b. have a pre-existing domain name registered in another top-level domain registry such as .com, .biz, .info, etc. (priority will be granted to those domain names registered prior to February 1, 2010).
If able to satisfy the above criteria, the corresponding domain name may be reserved by the business in the .xxx registry before it is opened to the general public.

By filing an application under the Sunrise B option, other types of businesses can ensure that they are not confused with an .xxx domain name where adult entertainment is promoted. This option is only available to businesses which own a subsisting nationally registered trade-mark in a jurisdiction where they carry on business. If accepted, an application under the Sunrise B option will effectively make the subject trade-mark unavailable to the registry. Note that it is only possible to block the exact textual components of a registered trade-mark and it is not possible to block any mis-spellings.

If your trademark is not registered, you will have to wait until the .xxx registry is opened to the general public on December 6, 2011 to seek a pre-emptive registration of your trade-mark and thereby prevent its registration by a third party.

If an application is filed for the same trade-mark under both the Sunrise A and the Sunrise B options, both applicants will be notified and the applicant seeking to opt-in to the registry will be offered an opportunity to withdraw its application. If it fails to do so, the applicant seeking to block the trade-mark from the .xxx registry will be entitled to commence proceedings under the Uniform Dispute Resolution Policy (the “UDRP”) or in the courts to resolve the dispute.

For more detailed information on how to exercise your options, visit the official web site for the .xxx registry at .

To proactively protect key trade-marks, businesses are encouraged to file an application during the sunrise period for each registered trade-mark considered vulnerable to either: (a) exploitation by a third party; or (b) potentially embarrassing confusion with a third party. A modest onetime fee, expected to be in the range of $200 to $400, will be due with each application filed. It’s a simple and inexpensive step to avoid potential embarrassment and confusion for your business on the Internet.

Disclaimer: The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

Some Thoughts on Bill C-32 to Amend Copyright Act

The US Digital Millenium Copyright Act (DMCA) uses language similar to that in the proposed Bill C-32 in that it prohibits circumvention of technical protection measures (TPM's) that restrict "access" to a work protected by copyright. A cursory review of US case law interpreting this language suggests that there are two lines of case law developing in the US: one line of cases that interprets "access" restrictively to only prohibit access that does not amount to fair use and one line of cases that interpret "access" broadly saying the if the DMCA intended to exempt "fair use" it would have done so explicitly. Frankly, the first line of cases does seem to fly in the face of the statutory language of the DMCA.

Nevertheless, this division in the US case law probably explains why section 41 of Bill C-32 tries to improve upon the language of the DMCA and defines a TPM as any means that prohibits both: (a) "access" to the work; and (b) restricts the doing of any acts which the copyright owner has the exclusive right to do. Reviewing Bill  C-32 with this distinction in mind, it appears that Bill C-32 may in fact preserve "fair dealing" in a rather serpentine manner and introduces a further exemption for "private purposes".

Curiously, Bill C-32 specifically prohibits circumvention to access a work, but does NOT prohibit circumvention of a TPM to exercise the exclusive rights of the copyright owner. Presumably circumvention of a TPM to exercise the exclusive rights of the copyright owner would result in a traditional infringement of copyright (which would also presumably be subject to further statutory exemptions for fair dealing, etc.).

Even more curiously, Bill C-32 later exempts a circumvention of a TPM to access a work from liability for statutory damages (ie. set fines) if the circumvention was undertaken by an individual for "private purposes": section 41.1(3). Consequently, the copyright owner may only seek an injunction and damages or an accounting of profits for such a circumvention. Of course, if the circumvention was simply to access the work and was undertaken for "private purposes", it's doubtful that there will be much in the way of damages or profit. It's also unlikely that injunctions would be sought in such cases given the costs involved unless the work embodies a valuable trade secret.

Unfortunately, "private purposes" is not defined. Frankly, "private purposes" seems broader than "fair dealing" and one wonders why they did not simply use the phrase "fair dealing" since that is already well-defined in the case law and fairly narrow in Canada.

Of course, Bill C-32 also prohibits offering services or selling devices whose primary purpose is to either access a work or to allow the user to exercise the exclusive rights of the copyright owner. It grants copyright owners the right to sue for an injunction and/or damages if their TPM's have been or "could be" circumvented by such services/devices. One then has to wonder if "fair dealing" and access to a work for "private purposes" have been effectively preserved in Bill C-32 in the serpentine manner described above, how individuals are supposed to exercise those rights without the available tools. I'm still working on that one...

Google Wins AdWords Case in Europe

This decision was a bit of a surprise to me.

It concerns Google's practice of "selling" priority in search results to advertisers who pay to be "associated" with a TM that is not their own. This includes retailers honestly trying to promote their genuine brand name products in their stores as well as competitors trying to trade on the good will of a famous mark to draw attention to their products/servies.

For obvious reasons, TM owners object to the "use" of their trademarks by competitors for this purpose and Google is facing lawsuits around the world about the issue. The question has always been whether this "use" of the trademark should be considered unlawful on its face. For instance, comparative advertising is not unlawful per se, but difficult to do without crossing the often "hazy" legal line.

My impression had been that Europe was generally more "pro" TM owner than free enterprise, but this decision seems to break that mold.

High Cost of IP Litigation

WIPO recently reported on discussion from a November 2009 session of the WIPO Advisory Committee on Enforcement (ACE) relating to concerns about the high cost of IP litigation.

The concern is not surprising. However, it is also not new. Concerns about the costs of litigation are perennial. Of course, IP litigation is especially expensive. However, as noted in the article, it really does (in all modesty) require specialized legal expertise.

In my humble opinion, another factor that often drives costs up in IP litigation is that the parties themselves are often business competitors and the substance of the dispute is a monopoly that one claims in the marketplace. Unlike other litigants, the parties therefore may not be highly motivated to settle.

CDN Copyright Law Stronger than US

In his blog, Howard Knopf recently compiled a list of 21 fairly compelling reasons why CDN Copyright law is already stronger than the US copyright law.

This is relevant since the US repeatedly includes Canada on a list of "naughty" countries with allegedly weak copyright laws. For some, the resulting public perception that Canada's copyright law is wholly deficient is infuriating.

More Details Leaked on ACTA Negotiations

The US, Canada and several other countries have been negotiating an international agreement concerning intellectual property for several years under a cloud of secrecy. Michael Geist reports on new information leaked about the contents of these negotiations as they relate to the Internet and copyright.

Most problematic may be the apparent effort to force participating countries to adopt strict "anti-circumvention" laws. These laws would prohibit the "hacking" of digital locks on creative works or the sale of any devices designed for this purpose.

The problem is that such laws, if enacted without exceptions, would effectively make it impossible for consumers/users to exercise their "fair use" rights without otherwise violating the law. A blanket prohibition would unduly favour the interests of the authors, owners and distributors of copyright protected works over the majority of businesses and consumers who are mere users of such works. Any such prohibition should be subject to appropriate exceptions to maintain a balance of these interests.

The Science, Technology and Innovation Committee at the Hamilton Chamber of Commerce recently submitted these concerns to the Canadian Chamber of Commerce about its own copyright policy and were provided the following response:

"The CCC will be standing by this policy as our corporate members do not favour a "fair use" provision being included in any upcoming legislation".

When I received this response, I wondered why the concerns of these "corporate members" take precedence over the concerns of the majority of small and medium businesses. It is just such elitist attitudes to copyright (and intellectual property law in general) that provoke so much animosity in the copyright law debate.

TM Owner Recovers 1017 Confusing Domain Names

In a precedent-setting decisionunder the mandatory Uniform Dispute Resolution Policy for .com domain name registrations, the owner of FREECREDITREPORT.COM was granted an order transferring into its control 1,017 domain name registrations considered confusingly similar to its TM. The registrations were all variations and misspellings of the FREECREDITREPORT.COM trademark or so-called "typosquatting" registrations.

Given that FREECREDITREPORT.COM may be considered a descriptive term on its face, the decision provides a good example of some of the difficulties encountered when attempting to enforce exclusive rights in such a mark.

Descriptive marks are not immediately eligible for protection as TM's. However, they can become eligible for such protection if used exclusively by one party for an extended period of time so that the mark acquires "secondary meaning" as a TM. The fact that the owner managed to get FREECREDITREPORT.COM registered as a TM in the US on this basis was critical to its success in this case.

The USPTO Blogs

The new Director of the USPTO has set up his own blog. The first entry can be viewed here. Comments are welcome although they are subject to editorial approval prior to posting.

The first entry concerns patents, the independent inventor and proposed changes in the US to convert to a "first to file system". The US is one of the few countries in the world that still grants patents to the inventor who was the "first to invent" rather than the first inventor who filed an application for the same invention (ie. "first to file"). As the Director points out, disputes over who was the first to invent only arise where two inventors independently develop the same invention at approximately the same time period. Canada is a "first to file" jurisdiction.

There are also good policy and practical reasons to favour a "first to file" system. Of course, it is controversial as you can see from the comments on the Director's Blog.

Australia: Academics not Universities own Intellectual Property

In a landmark decision that may have broad implications for educational institutions all over the world, an appeal court is Australia has upheld a trial decision which found that individual academics, and not their universities, own intellectual property over their inventions.

In the trial decision, the court found that although academics may have a duty to conduct research under the terms of their employment, this duty does not involve a "duty to invent". Consequently, it found that individual academics, not universities, would usually own intellectual property in their inventions.

Drawing a distinction between "pure research" and the "commercial development of inventions" can be an exceedingly "fine line" as many commercially valuable inventions are derived from so-called pure research. For this reason, some would argue that it's a nonsensical distinction.

One on side, there is the costly equipment made available by universities for the conduct of pure research – most of which is likely paid for by tax dollars – which suggests that universities should have some financial interest in any commercial applications developed. On the other side, there are arguments about academic freedom and the long-standing traditions of universities with respect to intellectual property that are not always in accord with the modern expectations of an employment relationship.

Often Canadian universities have intellectual property policies under which they share the profits with their academics for any commercially valuable inventions developed during their employment. However, the key to the validity of these policies may be whether or not they are incorporated into the employment agreements – most often these are now union negotiated labour agreements in Canada.

Walmart & Union Fight over Colourable Use of TM's

As noted previously in this blog, there are no recognized exceptions (yet) in the Canadian law respecting trademarks and copyright to provide an outlet for freedom of expression. In previous legal wrangling between Unions and TM owners, the Unions have been less than successful in convincing the courts that such an exception should be made. But its a fight that will, no doubt, be fought again and again.

Now the NY Times reports that Wal-Mart is relying on TM law in an attempt to shut down a web site operated by the UFCW which is, of course, trying to recruit union members from Walmart employees.

To my mind, the interesting question is whether a freedom of expression exception should be made for unions who are often in the position of criticizing employers for the collective good of their employees (and arguably the public good). In other words, why should trademark owners be entitled to prohibit any negative associations with their marks if those associations are true or at least "fair"?