So it seems that the long smoldering American fascination with Australian culture has flared up again. Not limited this time to obsession with quirky entertainment giants and bland rock style bands, this go-round has seen the frenzy extend to that most American of pastimes: the lawsuit. Following closely on the heels of an Australian consumer watchdog’s suit against Google, American Airlines has sued the Internet search leader for alleged actual and vicarious trademark infringement. At issue is Google’s wildly popular AdWords program. The Adwords program allows advertisers to bid on search terms and phrases that, when entered by Google users as search queries will trigger the display of the high bidders’ advertisements alongside Google’s “organic” search results.

American Airline’s complaint boils down to the assertion that Google actually and vicariously infringes on AA’s marks in two ways: 1) by allowing non-authorized parties, including competitors, to bid for AA’s marks as keywords, and 2) by allowing non-authorized parties, including competitors, to use AA’s marks in the advertisements displayed by the service.

AA claims a number of damages resulting from Google’s practices. Chief among these : 1) AA is forced to pay Google for the use of its own marks as keywords, 2) Google users searching for AA by using AA marks may be presented with ads for non-AA parties, and 3) Google users may be presented with ads for non-AA parties that include AA marks.

The question of whether infringement of AA’s marks results when unauthorized advertisements incorporating the marks are displayed with search results seems like the kind of thing that can be sorted out by applying lines of reasoning from past cases of a similar nature in the physical world. In other words, it bores me, so I’ll leave it alone. The far more interesting question is whether trademark infringement does, of in fact can exist in the context of bidding for advertisement triggering keywords that are or are confusingly similar to AA’s marks.

Trademark, of course, ostensibly exists as a means of protecting consumers against the dangers of counterfeit products — the purpose being to prevent a provider of low quality goods or services from passing off his wares as those of a known, high quality producer of the same. The use and reasonable scope of trademark is relatively clear when it comes to branding a product or method or place of business or what have you. Meaning that if I slap a mark on my widget indicating that I am its originator, it is pretty obvious what’s going on when another widget producer places my mark on the widgets he originates. Far less clear is the application of this scheme to the search context.

So what it comes down to is this: Is the use of a term to trigger a result in connection with an Internet search a “use in commerce” within the meaning of Trademark law? In the interest of evaluating on substance rather than form, lets try it out in the real world. Say I represent a mall food court joint called Impact Kings Wok…and say you’re a mall patron making a beeline for nearby Golden Dragon Hunan Garden. Suppose, then, I were to intercept you with a sample tray. I might say: “Hey, dude, I know you think Golden Dragon Hunan Garden has the best wontons in the entire food court, but I’m here to tell you that Impact Kings Wok makes a pretty dang good wonton–why not give us a shot?” Suppose, then, that you were convinced to deviate from your plan of chowing at Golden Dragon Hunan Garden and come check out the Impact Kings Wok. Trademark violation?

What if I took my diabolical schemes up a notch? What if I put an “Impact Kings Wok is better!” sticker next to the Golden Dragon Hunan Garden listing on the mall directory? What if I went to the nearby sign store and bought up all of the letters in Golden Dragon Hunan Garden? What if I went up to everyone in line for the Golden Dragon Hunan Garden and persueded them to bring their business to the Impact Kings Wok?

Have I violated Golden Dragon Hunan Garden’s rights in its name? Doubtful. I have not attempted to pass off my product as theirs. I have not tried to dilute the goodwill associated with their name. I have simply offered the consumer an alternative. See what I’m getting at?

So what happens when we bring form back into the equation? In short, it confuses things. This is because we have people actively buying and selling words that may, in some contexts, be the trademark protected property of a third party. Further, we have merchants using competitor’s trademarks to trigger their own advertisements. So: “use in commerce” within the meaning of trademark law? I vote no. Programs like AdWords have opened up new channels of communication in which a consumer’s signalled intent to purchase something can be met with offers from competing vendors. This is a far cry from the type of “passing off” that trademark is intended to prevent.

So persuasive is my reasoning that the District Court for the Northern Distric of New York stole my logic, hopped in its time machine, set the knobs and dials for 11 months ago, and applied it in the case of Rescuecom v. Google. I’m joking of course–the District Court for the Northern Distric of New York has long used a wormhole near Utica. Interestingly, they did a much better job of explaining the reasoning than I have here, so check it out. As a quick nod to procedure, I will note that the court’s decision was in the form of a grant of Google’s 12(b)(6) motion to dismiss. For those who understand the import of that, great. For the rest, no worries–it’s a law nerd thing. For everyone, it is important to note that that that court’s decision need not have any effect on the treatment of the American Airlines case.

Next up: what the outcome of this case could mean for AdWords users, the companies that love them, the companies that hate them, and the people who click on ads for offshore pharmacies…

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As the new media vs. old media battle continues to unfold, it has been interesting to watch how each vacillates between courageous innovator and meek victim. First we had the DMCA and the proliferation of semi-hidden, contract based schemes of reservation and denial of traditional rights. Then the old media guys started suing their customers. Then the old media guys started suing the new media guys. And now this: The Computer & Communications Industry Association, a trade group consisting of Microsoft, Google, Yahoo!, and others, has filed a complaint with the FTC, asserting that the old media guys have, for years, been making deceptive statements to their customers about the scope and nature of their intellectual property rights. Go Team! The motivation for this complaint, according to the CCIA, is protection of consumers. Copyright statements warnings made, say, at the start of a ballgame or movie are, to the CCIA “…an assault on free expression and force consumers to continually forgo lawful activities to which they are entitled under federal law and the Constitution.” Dag, y’all. Lets think on that a minute… Stormy nights, they say, make for strange bedfellows…and Google and Microsoft are certainly strange bedfellows. In one corner we’ve got the quintessential digital media giant– strong proponent of a brutal regime of copyright power. In the other corner, we’ve got those friendly upstarts at Google, who want free access (and the ability to freely transmit) all digititalizable information that is…including the contents of your own hard drive. So why the love? Neither one of them has a track record of making anything particularly interesting by way of content. For content, they have to reach out. As poor quality snippets of teenage guitar wizards , jackass wannabes, and video game superstars can only take them so far, they’d like to continue to bolster their content libraries with assets provided by the old media guys who take the time, spend the money, and have the experience to do it right.

Don’t buy it! Though I agree with many of the principles of the complaint–especially those asserting the problems with limiting statutory and constitutional rights–many CCIA members are guilty of the same and worse. SO what do they want? More on that later…

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So I know I’m supposed to finish my missive about compliance by certain service providers with certain subpoenas that seek to unmask John Doe defendants…and I will get back to that. In the interim, I came across an interesting (and tangentially relevant) development out of law and technology powerhouse Oklahoma. In another flare-up in the ongoing assault by the record insustry against its (potential) customers, Arista Records issued a subpoena to non-party Oklahoma State University seeking to unmask a number of John Does who had made use of the University computer network. Arista’s complaint is pretty much standard fare. What’s interesting here is the defendants response, which challenged the fitness of IP address information as a means of uniquely identifying individuals or individual machines. Check it out — it raises some interesting questions about the way defendants are identified in these types of lawsuits.

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The John Doe Lawsuit is nothing new to the Internet playing field. Plaintiffs have used them for years to pursue actions against otherwise anonymous Internet posters. Typically used to fight whistleblowers, trade secret violators, files sharing kiddies (and their Snoop Dogg loving grandmothers), John Doe Lawsuits have typically been used to pierce the anonymity of pseudonymous Internet users who are accused of committing some real world wrong.

Recently, however, we’ve seen the expansion of this type of action to wrongs that take place entirely in virtual worlds. In a recent development, Second Life purveyor Linden Labs and Internet transaction giant PayPal acceded to a subpoena requesting the identity of a patron of both companies. The issue? Plaintiff Eros LLC alleged that the John Doe defendant had violated its copyright by knocking off its virtual product.

Some Background: The Second Life virtual world allows users to create unique objects through a 3D modeling and animation programming interface. These objects can be shared or made available for sale in Second Life or other markets, using the currency of either (second life currency can be freely exchanged with US dollars). Second Life has implemented a system that allows the owner of a unique object to impose restrictions, or a lack thereof on the distribution of their creations. In other words, the Second Life world has in place a system that allows the creator of an object to reward his ingenuity and skill with a right to sell his designs, and to control the subsequent resale of those designs. Eros has accused a John Doe going by the in-world name of Volkov Cattaneo of hacking Second Life’s protection system to allow it to copy Eros LLCs product and offer it for sale for a third of the Eros asking price of USD 45. The product in question? Well that’s where it gets interesting. It’s a…uhhh…sex bed….

The prompt and voluntary compliance by Linden Labs with the subpoena’s request that the real identity of Cattaneo be revealed to the plaintiff has been the cause of some uneasy stirrings in the Second Life community. Posessed of the common (if somewhat whimsical) expectation of anonymity and a belief that what happens in Second Life stays in Second Life, a portion of the community has expressed the sense that Linden’s ready cooperation with the subpoena has struck a blow to one of the fundamental assumptions under which activity and commerce in Second Life take place. Many feel betrayed that Linden could so casually jettison what has long appeared to be one of the house rules. Some commentators have even expressed a desire to see real life rules of procedure altered to make the unmasking of Second Life personalities more difficult.

An expectation of anonymity in Internet dealings is not without precedent or good reason — but the context here is all wrong.

A relatively strong line of cases descending from Dendrite International, Inc. v. Doe No. 3, (775 A.2d 756) has held that the First Amendment interest in protecting online anonymity should bar erstwhile plaintiffs from unmasking anonymous posters with subpoenas in cases where the alleged wrong involves speech. It is the alleged wrong that is different here. Eros LLC’s action involves a claim of copyright violation. This is not some nuisance SLAPP suit, or complaint about the fact of the speech. This allegation involves a very real theft of intellectual property and Linden Labs was dead right to cooperate.

Why? Long story short: Second life intellectual property violations are real world intellectual property violations. Short story long: stay tuned for part 2.

Lots more to come…

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Remember that time I noted that provisions of the DMCA could be used to oppress and stifle innovative activity once protected under copyright law (that time yesterday…and the day before…and last week…and probably again tomorrow)? Well here we go again! After being verily crushed as plaintiff in a trademark infringement suit, Healthcare Advocates, Inc. brought its righteous anger to bear on the law firm that had represented on of the victorious defendants. Why the wrath? Turns out that law firm Harding, Earley, Follmer & Frailey had used the Internet Archive Wayback Machine to do a little sleuthing on former versions of the Healthcare Advocates website.

See the problem?

Neither do I.

Here’s what Healthcare Advocates and its bang up legal team saw: circumvention of a technical measure designed to control access to a Copyrighted work–a violation of DMCA Section 1201(a):

“No person shall circumvent a technological measure that effectively controls access to a work protected under this title.”

The gist of the argument is that Healthcare Advocates had in place on its website a robots.txt file instructing the Wayback Machine’s web crawlers not to archive the site (read: a technological measure designed to control access to a copyrighted work). Something got hosed and some of Healthcare Advocate’s pages were archived anyway–and visible to H,E,F & F. The argument, then, was that H,E,F & F’s use of the Wayback Machine to view archived pages was a circumvention of the access control ostensibly provided by the robots.txt file.

Hmmm…

Here’s my beef:

Simply put, the robots.txt instruction is not a “technological measure that effectively controls access to a work…” First, it was apparently not effective, given that a standard web crawl bypassed the measure–but that’s beside the point. Second, adherence to robots.txt instructions is not compulsory. Lots of robots out there don’t comply with robots.txt instructions and they are under no duty to do so. This is a technical measure that requests that another party voluntarily limit its access to a work. Third, it seems there was no circumvention. The Wayback Machine webcrawler employed no nefarious methods to unlock or break the protection supposedly provided by the robots.txt instruction — it just went in, sort of like one might enter a store or office or other physical facility of a company that was open for business.

Now, I’m not arguing that website owners don’t have the right to control access to their content - present, past, and future. I’m also not attacking anyone for developing novel legal theories. My issue is with the perils created by a statute that boots a longstanding, settled understanding of the rights of various parties under copyright out the window and encourages absurd results. Such an application of the anticircumvention provision would have a chilling effect on all Internet commerce, turning every Google search into a potentially criminal activity. To draw an analogy to pre-DMCA law, this would be akin to finding criminal copyright violation to result from someone entering a public library through the out door and reading a book. I didn’t sign up for that. Did you?

Fast forward to the dismissal of Healthcare Advocate’s complaint. For those DMCA fanboys out there who will cite this one as proof that the dangerous provisions of the DMCA will be applied sensibly, I say this: how might this have turned out if the defendant hadn’t been a law firm? What if this theory were used to bring suit against a party without the knowledge or resources to point out it’s ridiculous nature? The worry isn’t so much what happens when something like this goes before a judge — it’s what happens when this type of complaint is used as a tool for bullying and intimidation.

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Well…as promised, I have started my two prong attack on the ol’ website thief. We have contacted an IP lawyer and gotten him started with the relevant details. I’ve also started doing a little research of my own. More later on the outcome of things with the lawyer. What I can say upfront is that I never cease to be amazed with what one can turn up on a person with a little ingenuity and a lot of Google…especially when one’s quarry is a moron.

Since the infringing publication is a website, I started with a sensible and utterly unglamorous whois check. As might be expected of an individual or a web design company that steals web designs, the pest had registered his domain anonymously. This was, however, his only sensible move. 2 or 3 Google searches later and I’ve got the guy’s name, former websites, examples of contracts, and other websites. I’ve also got his myspace account…so I’ve got his picture, his hobbies, contact info for his friends and his “friends”, his social schedule, and his advertisements and bragging statements about the business he has built on a purloined website. In all, I’ve got quite a window on this self styled DJ and party guy and his his life. We’ll see what all I turn up…

The tally so far: 20 mins to gather relevant info to get the lawyer on the case. 8 minutes for an email. 4 minutes for whois, netcraft, and Google searches. 10 minutes reading up on the thief. 7 minutes laughing at a ridiculous photo of this joker swilling a bottle of Cristal like an unpopular, untalented Jay-Z (pre-dispute, of course). Anyway…back to it. More later.

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So Second Life creator Philip Rosedale says that virtual worlds will be bigger than the Internet in 10 years. Whatever. The fact is that they’re big…and getting bigger. But what will happen as these MUDs continue to mature into something more than late night nerd playgrounds? It’s already happening: Second Life is quickly becoming a remarkable proxy for our first world — home to cultural events, thriving businesses, in game and out of game services, and even its own Reuters Bureau. As more people rely on virtual characters, virtual real estate, virtual products, and virtual services to make real money, serious policy questions will come to bear — and serious policies will need to be formed. And we all know how good policy makers are at keeping up with technology and lifestyle developments…

The issue is too big to work through or even properly introduce in one post, but I’ll go ahead and try to put it in a nutshell. Property rights form the foundation of Anglo-American law. Our rights in property and the settled expectations that come with them form the basis of our lives, our economy, our system of laws, and our interactions and transactions others. The question, then, is what kind of rights do we have in this new property. The answer, it seems, is not much. Treatment of this new property, which is neither physical nor intellectual, has virtually no guidance from statutory or case law, and it seems that fitting analogies to existing property rights regimes may be of little use. For the time being, it appears that all rights in this type of property, to the extent that they exist at all, are derived from the contracts required for account set up (We’ll be looking at these later). This may or may not be a viable solution. Up until now, government has largely avoided dealing with the huge host of issues that activity and commerce in these worlds has brought up. This will no doubt change as the revenuers turn to these worlds for new ways to squeeze people…and the moralizers strike out at these realms of iniquity. Mostly this will change because if Rosedale’s bold vision of the future is to find any degree of fulfillment, there will be a dramatic increase in productive use of these worlds — read: commerce. This means increased exchange between virtual property and real world property, making virtual property portfolios every bit as real as traditional financial portfolios — and in-world reputations every bit as important and valuable as real world goodwill. Even if governmental forces don’t nose in and try to ruin it for everyone (which they will), those users engaged in commerce will demand a greater degree of protection for the reputations, and virtual currency and property that they accumulate in the worlds than can be provided by the arbitrary and ever shifting contracts offered by the purveyors of these services. A recent financial downturn in the world of Second Life shows that these concerns are very real. Virtual worlds are no longer just games–they are communities and markets and economies. I don’t think that there’s any need for a complex, top heavy, expensive scheme of government regulation…just a way to get to a settled understanding or rights to in-world property sufficient to allow these economic engines to develop.

Lots more to come…

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Well, it’s finally happened - after years of following Internet property issues from the comfort of the sidelines, today I found myself right in the middle of a juicy Internet IP issue of my own.

Turns out some guy has…ahem…infringed…on intellectual property contained in my employer’s website. “Infringed” is perhaps too genteel a term: this was a real beaut — design, images, copy, claims on trademarked terms and proprietary business method — all completely stolen…and displayed with a shocking (and sort of enviable) lack of shame.

So anyway, I think there’s an interesting opportunity here. Having watched a number of matters of this nature, I have a pretty good idea of what I need to do to get this resolved. I am, however, in a position where I have access to the services of another attorney, and I’d really like to see how this works from the perspective of the standard website owner — so here’s what I’m gonna do: I’m gonna do a little research of my own here…then I’m gonna get on the line with our IP lawyer and see how the process works…This oughta be interesting…

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So it looks like it’s time for another clash between global “free market” interests and national sovereignty - and this time its not over something so mundane as steel tarriffs or a little lead paint. Today’s beef is over internet gambling — recent U.S. law prohibits cartain transactions related to online gambling, ostensibly taking a bite out of the industry. Seems Antigua and Barbuda (two of the Carribean countries rife with online gaming operations that target the American market) are feeling a bit pinched by the U.S. policy. Noting that the policy runs afoul of WTO trade regulations, these countries have asked that body to intercede on their behalf — to the tune of $3.4 Billion. I’m not even going to attempt to parse this one yet — I will limit comment to a renewal of my concern over the WTO’s sovereignty stealing, omnibus, multilateral trade agreements, and to revel in the lawyer friendly gray areas and red tape resulting from the claim of jurisdiction over Internet actvities by yet another (quasi) governmental body. Go Free Trade!!!

check it out!!!

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