• Trademarks on the Internet—Fair Play or Fair Game?
• Who Is Right About WHOIS Privacy?

Mr. Tiffany is a partner in Pillsbury's Palo Alto, CA office and Mr. Burlingame is a senior associate in the
San Francisco, CA office.

When it comes to use of trademarks on the Internet, it’s all about fairness – fairness to the trademark owner, to the consumer, to competitors and to purveyors of Internet searching and other services.

Fairness has always played a role in determining whether use of a trademark has crossed the line and become unlawful. The test for trademark infringement typically mirrors the test for unfair competition, and the phrase “unfair competition” itself underscores the fact that only certain “unfair” types of competition are prohibited. Furthermore, there is a recognized “fair use” defense to trademark infringement.

But fairness is a subjective and fact-based concept, and the judicial system is currently confronting the question of what is “fair” in regard to trademarks in the dynamic Internet environment.

Internet trademark issues first hit the legal radar screen with the use of trademarks in domain names, and officials reacted by adopting new federal laws and administrative dispute procedures. More recently, with the explosion of new and evolving forms of Internet advertising, the focus has shifted to the use of trademarks by search engines and online advertisers, with only guidelines and principles – and no clear answers – available at this stage of the debate.

The Struggle With Domain Names

When the Internet gold rush was at its peak, companies and individuals rushed out to stake their claims to domain names. Companies who had been peacefully sharing the same name in different fields suddenly found themselves competing for exclusive rights to a particular domain name. Newcomers insisted they had a right to register domain names containing generic or descriptive terms, even if another company had developed brand recognition using those terms in a different industry. Of course, many opportunists – so-called “cybersquatters” – also seized upon the chance to register desirable names in hopes of selling them for profit.

Because a domain name often gives no indication of the products offered on the corresponding website, traditional trademark rules have been difficult to apply to domain name disputes. Trademarks are usually evaluated in the context of the goods or services for which they are used. If the goods or services are distinguishable (e.g., one company uses the trademark on computers and another uses the trademark on fishing poles), then identical trademarks generally are permitted to co-exist because consumers are unlikely to be confused about whether the sources of those products are related. The absence of a likelihood of confusion creates a situation that is generally deemed to be fair to consumers and to trademark owners. Even if there is no likelihood of confusion, use of a famous trademark is sometimes deemed to be unfair to the owner of that trademark. To address the unfairness in such instances, the concept of “trademark dilution” was developed. See 15 U.S.C. § 1125(c).

On the Internet, on the other hand, consumers cannot see what goods or services are being offered until they have viewed the webpage associated with a domain name. This new technology presented new legal issues.

To address this new reality, some courts relied upon a concept called “initial-interest confusion.” See, e.g., Brookfield Communications Inc. v. West Coast Entm’t Corp., 174 F.3d 1036 (9th Cir. 1999) (ordering preliminary injunction against West Coast Entertainment’s use of MOVIEBUFF and moviebuff.com on account of potential initial-interest confusion with Brookfield Communications’ MOVIEBUFF trademark). As applied to the Internet, the concept recognizes that consumers frequently rely on trademarks to find websites – for example, consumers often submit trademarks to an Internet search engine or use trademarks when guessing at a desired website address. Consequently, an opportunistic party can attract consumers to its website by using another party’s trademark (e.g., in the opportunistic party’s domain name, web address, metatags and other hidden source code, or even in the text of its website), thereby benefiting from the consumers’ “initial-interest” in locating the trademark owner’s website.

Taking advantage of another’s trademark has been deemed to be unfair, and to curb this new species of misappropriation, courts have cited initial-interest confusion to find trademark infringement even in cases where consumers, upon reaching the infringer’s website, quickly realize that the website is unrelated to the trademark that triggered their search. Although courts have applied the initial-interest confusion concept somewhat inconsistently to the Internet, their application of the concept generally has been aimed at protecting a trademark owner from a competitor’s unfair use of the trademark. See, e.g., OBH, Inc. v. Spotlight Magazine, Inc., 86 F. Supp. 2d 176 (W.D.N.Y. 2000) (enjoining use of thebuffalonews.com by disparaging competitor on grounds of initial-interest confusion for consumers expecting to arrive at The Buffalo News website); Interstellar Starship Servs. v. Epix, Inc., 184 F.3d 1107 (9th Cir. 1999) (reversing declaratory judgment that permitted Interstellar’s use of EPIX.COM, and explaining that initial-interest confusion could result because parties operate in similar markets and Interstellar might obtain consumers by capitalizing on Epix’s goodwill); cf. Chatam Int’l Inc. v. Bodum, Inc., 157 F. Supp. 2d 549 (E.D. Pa. 2001) (dismissing complaint by producer of “Chambord Liqueur Royale” against Bodum’s use of chambord.com for “Cafetiere Chambord” coffeemakers, and finding no initial-interest confusion because parties were not competitors and Internet users were not likely to be confused).

Similarly, to reach a fair compromise between trademark owners and domain name opportunists, lawmakers developed the federal Anticybersquatting Consumer Protection Act, 15 U.S.C. § 1125(d), and the internationally organized non-profit corporation known as ICANN (Internet Corporation for Assigned Names and Numbers) created the Uniform Domain Name Dispute Resolution Policy. Uniform Domain Name Dispute Resolution Policy (Oct. 24, 1999), available at http://www.icann.org/udrp/udrp-policy-oct99.htm. Such mechanisms enable trademark owners to take action against confusingly similar domain names but, in a nod to fairness, require that the trademark owner prove that those domain names were registered “in bad faith.”

Pop-Ups, Pop-Unders, Pop-Overs – Oh My!

As the clamor over domain names diminished with the arrival of the anti-cybersquatting legislation and policies, the judicial focus regarding trademarks on the Internet shifted to expanding forms of advertising.

Driven by the effectiveness of such Internet ads and the competing technological measures designed to thwart them, Internet advertising continues to evolve and includes pop-ups (ads that appear in a separate window in front of the consumer’s Internet browser window), pop-unders (ads that appear in a separate window beneath the Internet browser window so that the consumer sees them once the browser window is closed) and pop-overs (ads that function and look like pop-up ads but are technically displayed in a new layer rather than a new window).

Many ads display trademarks or lead to other websites that display trademarks. Additionally, trademarks are often incorporated into the programming code that triggers targeted ads to appear. With the proliferation of advertising on the Internet, intense competition in cyberspace, and consumers struggling to minimize or eliminate the intrusion of online advertisements, a new legal battleground has emerged for testing fairness in the use of trademarks.

Gator’s Pop-Up Ads Enjoined

One of the first reported decisions involving the use of trademarks in Internet advertising dates back to July 2002, when a federal court in Virginia granted a preliminary injunction against online marketing company The Gator Corporation (“Gator”). Washingtonpost.Newsweek Interactive Co., LLC, et al. v. The Gator Corp., 2002 WL 32153438 (E.D. Va. 2002).

Gator, which is now part of Claria Corporation, distributed ad-related software (“adware”) that became installed on many Internet users’ computers. The adware tracked consumers’ Internet activities and used various criteria, including trademarks, to trigger the display of targeted pop-up ads when a consumer visited specific websites.

Sometimes the Gator ads featured trademarks belonging to competitors of the website that the consumer was visiting. For example, when some consumers visited the weightwatchers.com website, they received a pop-up ad for dietwatch.com (a result which prompted Weight Watchers to obtain an injunction against DietWatch in June 2002). Weightwatchers.Com, Inc. v. Dietwatch.Com, Inc., 2002 WL 1797753 (S.D.N.Y. 2002).

But in other instances, Gator’s software displayed ads and trademarks that were not in direct competition with the goods or services offered on the underlying website. Such was the case in the lawsuit brought by The Washington Post and other publishers against Gator in 2002. The publishers argued that Gator was luring away their prospective advertisers by suggesting that it was more effective to advertise on a targeted website through Gator than to approach the owner of that website for advertising space.

In a succinct one-and-a-half page order, the U.S. District Court in the Eastern District of Virginia granted the publishers’ request for a preliminary injunction against Gator. The injunction in part prohibited Gator from: (1) causing its pop-up ads to be displayed on any website owned by or affiliated with the plaintiffs without the plaintiffs’ express consent; (2) making any designations of origin, descriptions, representations or suggestions that the plaintiffs are the source, sponsor or in any way affiliated with Gator’s advertisers or the advertisers’ websites, services and products; and (3) infringing, or causing any other entity to infringe, the plaintiffs’ trademarks and/or other service mark rights. Following the court’s granting of the preliminary injunction, Gator settled the publishers’ lawsuit. A number of businesses (e.g., L.L. Bean, UPS, Extended Stay America, Wells Fargo, Quicken Loans, and Teleflora) filed subsequent lawsuits against Gator and Claria Corporation, but such suits were similarly settled.

In its brevity, this Gator order left some key questions unanswered. For example, it summarily enjoined Gator from “infringing” the plaintiffs’ trademarks without clarifying what type of trademark use would constitute infringement in the online world. Similarly undefined was non-infringing “fair use” of a trademark.

Presumably, the Gator order reflected the court’s attempt to balance the competing interests of the publishers and the online marketing company. In this case, the court concluded that the balance of fairness tilted in favor of the publishers, perhaps because of allegations that Gator was luring away prospective advertisers from the publishers, or perhaps because of the court’s apparent belief that Gator’s pop-up ads were altering the appearance of the publishers’ websites.

WhenU’s Pop-Up Ads Deemed Permissible

The dividing line between trademark infringement and permissible advertising practices in the online world was addressed again in 2003 when the federal courts began grappling with three different cases involving one of Gator’s competitors, WhenU.com, Inc. ( “WhenU.” ) When the dust settled, WhenU had prevailed in all three.

WhenU distributed a downloadable software program named “SaveNow.” Similar to the Gator software, WhenU’s software program displayed pop-up ads based on a comparison of the consumer’s Internet activities and commonly used search phrases, commonly visited web addresses, and various keyword algorithms. The search phrases, web addresses and keywords included other parties’ trademarks.

As SaveNow was generally bundled with other software programs, many consumers did not know it was on their computers. Presumably to address concerns arising from such lack of consumer knowledge, WhenU’s pop-up ads began featuring the SAVENOW trademark on the ad’s title bar and including a disclaimer at the bottom of each ad which stated, “This offer is provided by WhenU Software. It is not sponsored or displayed by any web sites you may be visiting. Click ? for more info.” The disclaimer, however, was not enough to help WhenU avoid multiple lawsuits alleging trademark infringement. The Federal Trade Commission (the “FTC”) has since pursued claims under the Federal Trade Commission Act (15 U.S.C. § 45(a)(1)) against companies that allegedly downloaded ad-related software onto consumers’ computers without their knowledge or consent. See, e.g., Fed. Trade Comm’n v. Seismic Entm’t Prods., Inc., 2004 U.S. Dist. Lexis 227788 (D.N.H. Oct. 21, 2004) (granting temporary injunctive relief because defendants’ unauthorized downloading of software that delivered pop-up ads likely constituted an unfair or deceptive act or practice in commerce).

Similarly, some states have adopted or are considering legislation to address the downloading of such unauthorized ad-related software (so called “Spyware” or “Adware”). In an effort to provide a uniform federal approach, the U.S. Congress and the FTC are also working on legislation.

U-Haul International v. WhenU
U-Haul cried foul when visitors to its website were greeted with WhenU pop-up ads for U-Haul competitors. Claiming that the WhenU pop-up ads were based on U-Haul’s web address and its “U-HAUL” trademark, U-Haul sued WhenU in October 2002. U Haul Int’l, Inc. v. WhenU.com, Inc., 279 F. Supp. 2d 723 (E.D.Va. 2003). While U.S. District Judge Lee expressed frustration at being bombarded by pop-up ads, he went on to grant summary judgment dismissing U-Haul’s case. Id. at 729. Although U-Haul appealed the dismissal of its suit against WhenU, the parties ultimately settled.

In finding WhenU’s ads permissible, the court emphasized that WhenU was not placing the U-HAUL trademark in commerce and thus had not engaged in the “use in commerce” required for a finding of trademark infringement. Rather, the court explained, “WhenU merely uses the marks for the ‘pure machine-linking function’ and in no other way advertises or promotes U-Haul’s web address or any other U-Haul trademark.” Id. at 728.

The court also highlighted several factors which might explain why it dismissed the case: (1) WhenU’s pop-up ads appeared in their own separate, distinct and WhenU-branded window; (2) WhenU’s pop-up ads did not include U-Haul’s name or trademarks; and (3) WhenU did not sell U-Haul’s web address to advertisers. Id. at 729. Perhaps most importantly, the court viewed U-Haul’s claims as relating to mere annoyance rather than significant harm and expressly framed the case as “an attempt by a trademark owner and copyright holder to limit annoying pop-up advertising from blotting out its website on the individual computer user’s screen.” Id. at 725. Thus, fairness, in this case, appeared to tip the scale in WhenU’s favor.

Wells Fargo & Co. v. WhenU
Following the U-Haul case, WhenU scored another victory in a similar case brought by Wells Fargo and Quicken Loans. Wells Fargo & Co. v. WhenU.com, 293 F. Supp. 2d 734 (E.D. Mich. 2003). Like the court in the U-Haul case, the U.S. District Court in the Eastern District of Michigan held that WhenU had not “used” the plaintiffs’ trademarks in commerce, and it declined to issue a preliminary injunction against WhenU. Id. at 769, 773. Although their request for a preliminary injunction was denied, Wells Fargo and Quicken Loans continued to pursue their lawsuit against WhenU; the case was settled in March 2005. Wells Fargo Co., v. WhenU.com, Inc., 2:03 CV 71906 NGE (E.D. Mich. 2003).

Wells Fargo and Quicken Loans made many of the same arguments that U-Haul had made in the federal court in Virginia, and the federal court in Michigan disposed of them in much the same way. Rejecting the plaintiffs’ claim of initial-interest confusion, the court explained that the U.S. Court of Appeals for the Sixth Circuit had not adopted that doctrine. Wells Fargo, 293 F. Supp. 2d at 764.

As in the U-Haul case, lack of significant competitive harm may have been a principal factor in the court’s decision not to steer this developing area of law against WhenU. The court noted that “plaintiffs have failed to come forward with concrete evidence of even a single customer or potential customer who failed to purchase products or services from them because of WhenU.” Id. at 755. The court also explained that the “dilatory behavior of the plaintiffs in prosecuting their claims, and their strategic decision to defer a trademark case while they fulfilled the jurisdictional requirements for a copyright claim, are inconsistent with a finding that WhenU’s ads are causing the plaintiffs’ irreparable injury.” Id.

Furthermore, fairness arguably tipped the scale in WhenU’s favor based on the court’s finding that plaintiff Quicken Loans itself had benefited from WhenU’s software. Id. at 755-56. A company related to Quicken had been using WhenU to advertise its products, thereby driving Internet traffic to sites belonging to the Quicken family of entities. Id.

1-800 Contacts v. WhenU
WhenU’s latest victory confirms that the scales of fairness have continued to tip in WhenU’s favor. In 2003 in the U.S. District Court for the Southern District of New York, 1-800 Contacts argued it was being harmed by WhenU’s software because visitors to its website were encountering pop-up ads promoting competitor Vision Direct. The court agreed and, in sharp contrast to the U-Haul and Wells Fargo cases, issued a preliminary injunction against WhenU. 1-800 Contacts, Inc. v. WhenU.Com, Inc., 309 F. Supp. 2d 467 (S.D.N.Y. 2003). Bolstered by its initial success, 1-800 Contacts also launched a similar lawsuit in March 2004 in Utah against its competitor Coastal Contacts for pop-up ads encountered upon visiting 1-800 Contacts’ website. 1-800 Contacts v. Coastal Contacts, 04 CV 249 (C.D. Utah 2004). The suit was settled in November 2004. Two years later, the U.S. Court of Appeals for the Second Circuit sided with WhenU, vacating the preliminary injunction and remanding with instructions to dismiss 1-800 Contacts’ trademark infringement claims. 1-800 Contacts, Inc. v. WhenU.com, Inc., 414 F.3d 400 (2d Cir. 2005).

The New York trial court emphasized several times that the defendants were profiting and “piggy-backing” on the plaintiff’s goodwill and reputation, 1-800 Contacts, Inc., 309 F. Supp. 2d at 498, and a belief that WhenU and Vision Direct had crossed the line into unfair conduct appeared to underlie the court’s reasoning and injunction against them.

The U.S. Court of Appeals for the Second Circuit disagreed and concluded that WhenU had not “used” 1-800 Contacts’s trademarks and was therefore not infringing those trademarks. 1-800 Contacts, 414 F.3d at 403. The court explained that WhenU had relied on the web address www.1800contacts.com to trigger pop-up ads, and that a web address, unlike a trademark, is like “a public key” that is fair for WhenU to use in this manner. Id. at 408-409.

The Second Circuit also emphasized that: (1) the pop-up ads appeared in separate WhenU-branded windows which had “absolutely no tangible effect on the appearance or functionality of the 1-800 website,” id. at 410; (2) the pop-up ads did not contain or display the trademark 1-800 CONTACTS, id.; (3) the pop-up ads did not actively divert or misdirect users, id. at 411; (4) the pop-up ads could be triggered by clicking on hyperlinks and not solely by typing in a particular web address, id. at 410; (5) WhenU’s software is voluntarily downloaded by users, id. at 404; (6) WhenU does not sell specific keywords to advertisers, id. at 409; and (7) WhenU’s SaveNow directory is inaccessible to the public thus precluding the possibility of visual confusion. Id. “A company’s internal utilization of a trademark in a way that does not communicate it to the public is analogous to a [sic] individual’s private thoughts about a trademark,” the court concluded. Id. “Such conduct simply does not violate the Lanham Act . . .” Id.

In reaching its conclusion, the Second Circuit also analogized the situation to one in which a drugstore places its generic brand on the shelf next to its competitor’s brand, hoping to “induce a customer who has specifically sought out the trademarked product to consider the store’s less-expensive alternative.” Id. at 411. Such competitive product placement is tolerated, the court explained, and “it is routine for vendors to seek specific ‘product placement’ in retail stores precisely to capitalize on their competitors’ name recognition.” Id. In essence, WhenU’s conduct was deemed fair because similar conduct is considered fair outside the Internet context.

The Search Engines Join the Fray

With online advertising revenue fueling many Internet companies, Internet search engines quickly joined the ranks of advertisers displaying targeted ads. Search engines began selling the right to have ads or “sponsored links” displayed, or to have preferred positioning, on the search results page when a consumer used the engine to search for particular terms or phrases (“keywords”). Because such keywords included other parties’ trademarks, infringement lawsuits soon followed.

Playboy Pursues Suit Against Netscape’s Keyword-Based Ads

The case of Playboy Enters., Inc. v. Netscape Communications Corp. challenged Netscape’s use of keyword-based banner ads. 354 F.3d 1020 (9th Cir. 2004). “Banner ads” (in contrast to pop-up, pop-under and pop-over ads) are displayed as part of the webpage that the consumer is viewing in the Internet browser window. While the holding itself was not momentous (the court merely decided that disputed factual issues precluded summary judgment of non-infringement for the defendants), the U.S. Court of Appeals for the Ninth Circuit panel used the occasion to express its views on several important Internet commerce trademark issues.

In Playboy, Netscape sold adult-oriented advertisers the rights to a list of 400 keywords, and the list included the terms “playboy” and “playmate” (which also function as trademarks of Playboy Enterprises). Id. at 1023. As a result, when a user searched on Netscape for the term “playboy” or “playmate”, the search results screen would display one or more of the adult-oriented advertisers’ ads. Id.

Unlike the courts in the WhenU cases, the Ninth Circuit did not analyze whether Netscape “used” the plaintiff’s trademarks. Instead, it appeared to assume that Playboy had proven “use” and went straight to “the core element of trademark infringement; the likelihood of confusion .  . .” Id. at 1024. On this key issue, the court found that the “Internet user will have reached the site because of defendants’ use of [Playboy’s] mark” and it concluded: “Such use is actionable.” Id. at 1026.

The court found that Playboy’s strongest argument against Netscape was based on the doctrine of initial-interest confusion (which has been adopted in the Ninth Circuit, but not in all circuits, as evidenced by the Wells Fargo case). Id. at 1024. According to the Ninth Circuit, even though consumers visiting the other party’s website might come to realize that it was unrelated to Playboy, the damage was already done once the user had connected to the unrelated website. Id. at 1025. “Through initial consumer confusion, the competitor ‘will still have gained a customer by appropriating the goodwill that [Playboy] has developed in its mark.’” Id. (quoting Brookfield, 174 F.3d at 1057).

Like the New York Court's anti-piggy-backing sentiments in the 1-800 Contacts case, the Playboy decision can be read as indicating that courts will not tolerate use of a trademark that capitalizes on the goodwill of the trademark owner.

However, a concurring opinion by Judge Berzon left open the possibility that trademarks could be used to trigger online ads so long as the ads did not confuse consumers about their source. Specifically, Judge Berzon said that the court was “not addressing a situation in which a banner advertisement clearly identifies its source with its sponsor’s name, or in which a search engine clearly identifies a banner advertisement’s source.” Id. at 1030. Therefore, an ad that conveys a readily identifiable and distinguishable source might be permissible.

In response to Netscape’s assertion of a “fair use” defense, the court expressed the view that a “fair use” could never be a “confusing use.” Id. at 1029. Other courts, however, had found just the opposite, see, e.g., Cosmetically Sealed Indus., Inc. v. Chesebrough-Pond’s USA Co., 125 F.3d 28 (2d Cir. 1997) (holding that fair use is a defense even if there is a likelihood of confusion between the marks), and the U. S. Supreme Court subsequently weighed in and held that the classic fair use defense (where the trademark owner’s mark is used to describe the alleged infringer’s product) is available even if there is “some possibility of consumer confusion.” KP Permanent Make Up, Inc. v. Lasting Impression, Inc., 543 U.S. 111 (2004). Consequently, whether Netscape’s keyword practices constitute fair or unfair use remains an open issue. Netscape settled its case with Playboy in January 2004.

Google Draws Fire With Its “AdWords” Program

Several cases involving Google, the popular Internet search engine, demonstrate that the trademark/keywords debate is far from over. Google operates a marketing program called “AdWords” through which an advertiser can buy the right to be associated with particular keywords. See http://www.google.com/ads/. Through AdWords, the advertiser and its link are displayed in a highly visible position when an Internet user enters the selected keywords into the Google search engine. Google has reported that more than 100,000 advertisers participate in its AdWords program, CNET News.com, Google Blows Past Estimates (April 21, 2005), available at http://news.com.com/2100-1030_3-5680097.html, and that, in 2003, 97 percent of Google’s profits come from targeted advertising. See Google Inc.’s “Form S-1 Registration Statement under the Securities Act of 1933” filed with the U.S. Securities and Exchange Commission on August 9, 2004, available at http://www.secinfo.com/d14D5a.144az.htm. Much is at stake as the battles continue over the fairness of Google’s practices.

American Blind & Wallpaper Factory v. Google
Despite the success of Google’s AdWords program, it has drawn criticism from trademark owners who believe that Google and others have unfairly profited from the owners’ trademarks. One such owner, American Blind & Wallpaper Factory (“ABW”), notified Google that it was infringing ABW’s alleged trademark rights in phrases such as “American Blind & Wallpaper Factory,” “American Blind Factory” and “Decorate Today.”

In a pre-emptive strike, Google filed a lawsuit in California seeking declaratory relief. Google, Inc. v. American Blind & Wallpaper Factory Inc., 5:03-cv-05340-JF (N.D. Cal. 2003). Shortly thereafter, ABW filed its own lawsuit in New York against Google and other companies that used the Google search engine (i.e., America Online Inc., Netscape Communications Corp., CompuServe Interactive Services Inc., Ask Jeeves Inc. and EarthLink Inc.). American Blind & Wallpaper Factory Inc. v. Google, Inc., 1:04 cv 00642 LLS (S.D.N.Y. 2004). In June 2004, the New York court granted Google’s motion to dismiss ABW’s suit on grounds of improper venue. Id.

However, the dispute between Google and ABW continue in California, where the court ruled on Google’s motion to dismiss and allowed most of ABW’s claims to go forward. Google, Inc. v. American Blind & Wallpaper Factory Inc., 2005 WL 832398 (N.D. Cal.). In doing so, the court acknowledged that, given “the uncertain state of the law,” there is a need to “consider both the relevant facts and the applicable law in the context of a fuller record.” Id. at *7, *9. It also found that ABW’s allegations of “use” might be actionable and cited the Playboy decision for the proposition that initial-interest confusion could result from Google’s use of ABW’s trademarks. Id. at *5-6. Consequently, although the court dismissed ABW’s claim of tortious interference with prospective business advantage (on the grounds that returning or future customers do not possess the necessary preexisting relationship with ABW to support such a claim), id. at *9, the court’s refusal to dismiss the bulk of ABW’s claims evidences a potential expansion of what might constitute “unfair use” of another’s trademarks.

GEICO v. Google
In May 2004, insurance company GEICO filed a suit against Google and Overture Services (a subsidiary of Yahoo!) disputing the defendants’ trademark-triggered advertising. Gov’t Employees Ins. Co. v. Google, Inc., 330 F. Supp. 2d 700 (E.D. Va. 2004). The U.S. District Court for the Eastern District of Virginia began by denying the defendants’ motions to dismiss and for summary judgment (thus permitting GEICO’s suit to proceed), and ruling that Google’s use of trademarks on the search results page constituted an actionable “use in commerce.” Id. at 704-05.

In a subsequent ruling, however, the judge concluded that there was no evidence of consumer confusion as to ads that did not contain GEICO’s trademarks. Gov’t Employees Ins. Co. v. Google, Inc., Inc., 1:04-cv-507-LMB-TCB (E.D. Va. Dec. 15, 2004). Overture settled in December 2004, but Google continued to defend the case. The judge later held, on August 8, 2005, that GEICO had “established a likelihood of confusion, and therefore a violation of the Lanham Act, solely with regard to those Sponsored Links that use GEICO’s trademarks in their headings or text.” Gov’t Employees Ins. Co. v. Google, Inc., 2005 WL 1903128 (E.D. Va. Aug. 8, 2005).

The opinion gave both GEICO and Google reason to celebrate. GEICO was undoubtedly pleased that the judge found likelihood of confusion and violations of the law with respect to certain advertisements that contained GEICO’s trademarks; and Google was undoubtedly pleased that the judge found that Google’s practice of using trademarks as keywords to trigger the appearance of advertisements was lawful in certain instances. “GEICO did not produce sufficient evidence,” the judge explained, “to establish that the mere use by Google of the GEICO trademark as a search term or keyword, even in the context of Google’s advertising program, violates the Lanham Act . .. .” Id. at *1. Google had also revised its policy, prior to the judge’s opinion, to address the conduct later held to be unlawful: Google’s current policy prohibits the use of a competitor’s trademarks in the text of an advertisement if the trademark owner objects. See http://www.google.com/tm_complaint_adwords.html.

Following the August 8, 2005 opinion, the trial was stayed for thirty days to allow GEICO and Google to consider settlement or face resumption of trial as to damages and a determination of who should be liable: Google or the advertisers. Gov’t Employees Ins. Co., 2005 WL 1903128 at *7. GEICO and Google promptly settled the matter under confidential terms at the beginning of September 2005, thus leaving the ultimate issues of liability and damages unresolved. See Associated Press, Google Settles Final Piece of Geico Trademark Case (September 7, 2005), available at http://biz.yahoo.com/ap/050907/google_geico.html?.v=2. The opinion, however, sends a clear message that the boundary between fair and unfair in this case was drawn at the use of another’s trademark in paid advertisements. Indeed, it is arguable that, unlike use of a trademark solely as a keyword to trigger the appearance of an advertisement, the use of a trademark as a keyword to trigger the appearance of an advertisement displaying such trademark is more akin to unauthorized licensing of another’s trademark to be used by the owner’s competitors. In October 2002, Robert Novak (associated with the PETS WAREHOUSE mark) filed a similar lawsuit in New York against Google, Overture and marketing company Kanoodle. Novak v. Overture Servs., Inc., 2:02 cv 05164 DRH JO (E.D.N.Y. 2002). In March 2004, the court denied the defendants’ motion to dismiss, thus permitting the case to go forward. Novak v. Overture Servs., Inc., 309 F. Supp. 2d 446 (E.D.N.Y. 2004). The suit was settled in April 2005. A lawsuit filed by 800-JR-Cigar, Inc. against Overture for its trademark-related ad practices was settled in July 2002. 800-JR-Cigar, Inc. v. Find What Com, Inc., 2:00 cv 03518 HAA (D.N.J. 2000).

Google Also Suffers Lawsuits Abroad

Given its international reach, it is not surprising that Google also has been subject to lawsuits in Europe relating to its advertising practices. And in Europe, where privacy rights are of particular concern, the courts have tended to side with consumers and trademark owners against Google’s practices.

In February 2004, a French court issued an injunction against Google on behalf of Louis Vuitton S.A.; a year later the same court ordered Google to pay damages. S.A. Louis Vuitton Malletier v. Société Google, Inc. et S.A.R.L. Google France. Similarly, in March 2005, a French appellate court held that Google’s practices violated France’s intellectual property laws, upholding a lower court decision that ordered Google to pay a fine to plaintiffs in the travel industry. Société Google France v. Société Viaticum et Société Luteciel.

In December 2004, in a lawsuit by hotel chain Le Meridien against Google, yet another French court held that Google had infringed on Le Meridien’s trademark rights by allowing Le Meridien’s rivals to bid on keywords featuring Meridien’s name and to have their own names appear in the related search results. Société des Hotels Méridien v. S.A.R.L. Google France. The court ordered Google to stop linking ads to Le Meridien’s trademarks. Id. at 6.

Google, however, has had better success in Germany. In 2003, a court in Munich held that Google was not directly or indirectly liable for an advertiser’s use of a trademarked keyword. Nemetschek AG v. Google, Inc. The court explained that search engines cannot be expected to investigate trademark claims involving online advertising and that it would be overly burdensome to require that Google constantly monitor keywords to determine whether they are trademarks owned by another party. Id.

Additionally, in September 2004, a court dismissed Metaspinner Media’s lawsuit against Google despite similar claims that Google had committed trademark infringement by allowing rival companies to purchase ads using trademarked terms. Metaspinner Media GmbH v. Google Deutschland.

Trademark Rules of the Road for the Internet Highway

These Internet trademark cases illustrate the difficulties in predicting when trademark “use” crosses the line into trademark infringement. Federal law permits and encourages the use of trademarks in comparative advertising, and consumers are accustomed to seeing competitors’ ads and trademarks presented side-by-side in print advertising. Should the Internet highway be subject to unique rules of the road?

To complicate matters further, the Internet is an international medium, and as evidenced by the European cases against Google, other countries may seek to apply their own sets of rules and laws. Because many search engines and online marketing companies operate abroad or may be subject to other countries’ laws, the potential for multi-jurisdictional liability significantly increases the complexity and uncertainty of these issues.

It is also noteworthy that the targets of litigation are not just advertising, software and search engine companies. Trademark owners are also suing the advertisers. For example, following its settlement with Google, GEICO promptly began sending “warning letters” to other insurers who had purchased the GEICO name as a keyword for search engine advertising. See WebProNews, Geico Threatens Sites Over Search Engine Ads (Sept. 13, 2005), available at http://www.webpronews.com/insidesearch/insidesearch/ wpn-56-20050913GeicoThreatensSitesOverSearchEngineAds.html. As a result, companies that are considering whether to use these developing types of advertising face uncertainty. Do the benefits of such advertising mechanisms outweigh the risk of trademark litigation by competitors?

Charting a business course in this area is particularly difficult today because the legal system has not reached a consensus on these issues. While the Internet and new marketing and revenue strategies continue to develop at a feverish pace, the slower-moving legal and legislative process is forced to play catch-up. Moreover, the hope for prompt guidance from the courts has diminished as many of the closely watched cutting-edge lawsuits have been settled.

At this point, the most that can be said is that when it comes time to determine whether trademark use is “fair” in Internet advertising, as in most things, fairness tends to be in the eye of the beholder. Courts faced with disputes in this evolving arena are endeavoring to implement recognized principles of trademark law, fair use and fair trade practices in order to draw the line between fair and unfair competition involving trademarks on the Internet. But until there is some consistency – and possibly some guidance in the form of federal legislation – everyone is left guessing whether their actions are fair play, or fair game for a lawsuit.

(Originally published by Pillsbury Winthrop Shaw Pittman LLP. Reprinted with permission.)

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What is WHOIS?

Although the many definitions of WHOIS vary widely in terms of detail, WHOIS is most simply a database of domain name owners. For a very detailed definition, see http://en.wikipedia.org/wiki/whois; for a more technical definition, search “whois” at www.dictionary.com. Launched with the purpose of allowing those “techies” who were savvy enough to register domain names in the early and mid-1990s to easily contact one another with questions or access problems, WHOIS has morphed into a repository of personal information accessible via a few mouse clicks to all with a modem.

With millions of domain names registered, the WHOIS database is a repository of personal and corporate names and addresses, most of which are correct. Verisign, the corporation responsible for administered “.com” and “.net” domain names has reported in excess of 40 million domain names registered. See http://www.verisign.com/information-services/naming-services/index.html (last visited February 13, 2006). The Internet Corporation for Assigned Names and Numbers (“ICANN”), the organization commissioned under a Memorandum of Understanding with the U.S. Department of Commerce, is responsible for administering the domain name system (“DNS”).

Domain names must be registered through accredited registrars. For domain names ending in the ubiquitous “.com,” each domain name registrant, or owner, agrees to contractual terms when registering a domain name. One of those terms is a promise to keep the WHOIS database current with the registrant’s contact information. The Registrar agrees to keep the WHOIS correct pursuant to an agreement with ICANN (see http://www.icann.org/registrars/ra-agreement-17may01.htm#2 (last visited February 13, 2006) for an example of the terms of the Registrar accreditation agreement). This obligation is passed on to registrants (an example of a registration agreement used by one prominent registrar may be found at http://www.godaddy.com/gdshop/legal_agreements/show_doc.asp?se=%2B&pageid=REG%5FSA (last visited February 13, 2006)). This contact information includes a full name, an address, an email address, a phone number, and a fax number for the registrant, an administrative contact, a technical contact, and a billing contact. Often, in cases where the domain name owner is not a corporation, the four contacts are the same individual.

How does WHOIS work?

Each registrar keeps its own WHOIS database; this database is available on the registrar’s website. Some of this information is also fed into the other WHOIS databases such as the WHOIS database maintained by Network Solutions Inc., the original accredited registrar.

“Thick” WHOIS vs.“Thin” WHOIS
Some WHOIS databases maintain all records for all or a subset of domain name registrants for a particular top-level domain, such as “.com.” This type of information is typically maintained by each registrar for the domain names registered through it. This is called a “thick” database because it contains all of the relevant information.

Some databases harvest minimal identifying information from the individual registrar databases, such as registrar name, name server and the expiry date of the domain name. These databases are “thin” databases, and to get more information, the user typically has to check the “thick” database of the registrar for the particular domain name.

Conducting the WHOIS query
Although there are many sophisticated means of searching WHOIS databases, most registrars now have a simple web interface that allows a user to simply type the domain name about which they are inquiring into a search box. The search results are displayed and formatted on a new webpage for easy viewing. Visit http://en.wikipedia.org/wiki/whois for details on different ways to query WHOIS servers (last visited February 13, 2006).

What is the purpose of WHOIS?

The purpose of the WHOIS database varies according to the interested group surveyed. Recently, several of ICANN’s constituencies weighed in with their opinions on this heated topic. See preliminary task force report on the purpose of WHOIS and of the WHOIS contacts, published at http://gnso.icann.org/issues/whois-privacy/prelim-tf-rpt-18jan06.htm on January 18, 2006 (last visited February 13, 2006). Not only did the answer to the question differ from group to group, but the rationales for why the answers were different were all quite compelling. Some of the “purposes” for the WHOIS database range from allowing anyone interested to contact any domain name registrant for any legitimate reason, all the way to the provision of basic information to put one in touch with someone who can solve a technical problem with the domain.

What are the benefits of unrestricted public access to WHOIS data?

Protection of intellectual property
The proponents of a regulation requiring domain name registrants to publish their true and correct contact information on publicly accessible WHOIS pages offer several reasons for their point of view. Probably the most predominate reason is so that nefarious “cybersquatters” (those who register domain names that reflect the trademarks of others in an attempt to siphon off business and/or goodwill) are more easily tracked. Correct information ensures that the domain name registrant is highly likely to receive a cease and desist letter, a UDRP complaint, or service of a lawsuit. Uniform Domain Name Dispute Resolution Policy, found at http://www.icann.org/dndr/udrp/policy.htm, often also used in a generic sense for any dispute resolution policy most TLDs require registrants to agree to. Most dispute resolution policies are based on the UDRP.

Business usage, technical support
Others use, or wish to use, correct, complete WHOIS information to make offers to buy a domain name, to commend or quarrel with a registrant on website content, or even to market to those listed in the database. Some examples of this might include commenting on a person’s political speech or criticizing someone for a moral or ethical position they have espoused on a website. The most basic reason to publish correct and complete WHOIS data is simply to allow access to the technical support staff of a website, in case the website is malfunctioning or there is some other error. In all cases, the amount of information needed for each purpose will vary.

False WHOIS data
Of course, though the registration agreements require correct WHOIS information, not all domain name registrants provide that information as requested. As a result, an unusually high number of domain names are registered to “Mickey Mouse,” “Barney Fife in Mayberry,” or “This domain for sale.” Having unrestricted access to this kind of information is not helpful for anyone.

What are the problems with unrestricted public access to WHOIS data?

Spam
With so much personal contact information at the fingertips of anyone who asks, there are bound to be problems. Probably the biggest complaint of domain name registrants is the use of “bots” to harvest email addresses and send millions of “spam” emails each day. A “bot” is a software “robot” that searches the web for email addresses, collecting them for use in email marketing. “Spam” refers to unwanted email, such as marketing or solicitation emails, usually sent to hundreds, thousands or millions of people at a time. Not only are email addresses captured, but bots can harvest home addresses, fax numbers and phone numbers, all for the purposes of hawking cheap medications, personal physical enhancements or pornography.

Identity theft
Another significant problem with having all of a person’s contact information accessible by anyone is the increased likelihood of identity theft. In some cases, someone’s identity may be stolen to gain access to their finances or other assets. In other cases, a person’s identity may simply be used for the purpose of registering domain names so it appears the individual whose identity was stolen owns a particular domain name, when in fact he/she has no control over the name.

Anonymity
Many people use the Internet as a “soapbox” from which they can quickly and easily pass along political, moral or other messages to anyone who searches for it, or actively stumbles across it. Yet, for every point of view, there is nearly always a counterpoint. This concept of free speech is a major tenet of United States ideology and the ideologies of most of the free world. See Doe v. 2themart.com, Inc., 140 F. Supp. 2d 1088, 1092 (W.D. Wash. 2001) for a discussion of the freedom of anonymity on the Internet; see also Columbia Ins. Co. v. seescandy.com, 185 F.R.D. 573, 578 (N.D. Cal. 1999). Sometimes the “speech” broadcast over the Internet, while being protected, is inflammatory or offensive, inciting persons having an opposing viewpoint to react. Often, the ability of a person or group to “speak” while hiding behind a shield of anonymity is paramount to the cause. Forcing domain name registrants who would like to take advantage of the anonymity of the Internet to speak freely to give detailed contact information removes the mechanism that protects their privacy.

Privacy
Very closely related to anonymity is privacy. While the anonymous user does not want her speech traced back to her, the private user simply does not want her information available to all. In many cases, the private user may already be a victim of a crime such as stalking or identity theft. For this person, having her personal details available for easy searching is an open invitation for the crime’s perpetrator to strike again.

Malware
Some individuals are so perverse as to actually take advantage of the WHOIS database and use the mined data to send malware to unknowing recipients. Malware is a term coined for malicious software, generally. Malware sent to people whose contact information is readily available can range from spyware to viruses to phishing attempts. Spyware is software that is installed on the computer of an unknowing victim that “watches” his/her computer usage; in many cases, the software actually takes full or partial control of the host computer. See http://en.wikipedia.org/wiki/Spyware for more information. A virus is a self-replicating program that spreads by inserting copies of itself into other executable code or documents. http://en.wikipedia.org/wiki/Computer_virus (last visited February 14, 2006). Phishing is “characterized by attempts to fraudulently acquire sensitive information, such as passwords and credit card details, by masquerading as a trustworthy person or business in an apparently official electronic communication, such as an email or an instant message.” http://en.wikipedia.org/wiki/Phishing (last visited February 14, 2006).

What is being done?

U. S. Department of Commerce
The Department of Commerce, which regulates the “.us” TLD domain space, recently “clarified” its policy regarding WHOIS information for “.us” domain name registrants. One source that reported this update was http://www.wired.com/news/privacy/0,1848,66787,00.html (last visited February 14, 2006). As of January 26, 2006, all registrants of “.us” domain names had to update the WHOIS records for their domain names or risk losing those names. Services purchased to shield a domain name owner’s contact information from public view were to be disabled. Some constituencies that advocate this approach are encouraging ICANN to adopt a similar stance on the WHOIS data for generic TLDs.

Canada and Europe
In other parts of the world, the privacy and security of personally identifiable information is of utmost importance. One website that tracks and compares the privacy law progression of the world is http://www.privacy.org/pi/issues/compliance/index.html (last visited February 14, 2006). The European Union and Canada are both actively passing data privacy laws that restrict the types of information companies may maintain, what information is allowed to be publicly accessible, and strict procedures for instances of “accidental divulsion” of sensitive data. The European Union’s Privacy Directive is a template or model for the individual EU member states to follow when passing their own privacy laws and can be found at http://www.cdt.org/privacy/eudirective/EU_Directive_.html (last visited February 14, 2006). Canada has a privacy law that affects many business that retain personal information (http://www.privcom.gc.ca/ekit/index_01_e.asp#000). Canada has also proposed a more restrictive WHOIS policy that will permit the Internet Registration Authority to collect registrant data, but to limit the data available to the public. One version of this new policy can be viewed at http://www.cira.ca/en/Whois/whois_privacy-policy.html. (Both pages last visited February 14, 2006).

In many cases, these laws are in direct conflict with a WHOIS policy of full and complete public information. Both Europe and Canada have applied pressure to ICANN to require a “bend” in the policy so that their citizens can register “.com” and “.org” domain names, for example, without violating their privacy rights.

ICANN
ICANN’s constituencies, through its WHOIS Task Force, have offered their definitions of the purpose of the WHOIS database and what information should be included. This information has been compiled in the “Preliminary Task Force Report on the Purpose of WHOIS and of the WHOIS contacts.” See preliminary task force report on the purpose of WHOIS and of the WHOIS contacts, published at http://gnso.icann.org/issues/whois-privacy/prelim-tf-rpt-18jan06.htm on January 18, 2006 (last visited February 13, 2006). The public comment period ended February 8, 2006. Commentary on the task force report can be found at http://forum.icann.org/lists/whois-comments/ (last visited February 15, 2006). On March 15, 2006, the Task Force released the “Final Task Force Report on the Purpose of WHOIS and of the WHOIS Contacts.” The Task Force final report can be found at http://gnso.icann.org/issues/whois-privacy/tf-report-15mar06.htm (last visited May 31, 2006). In this document, the Task Force voted to accept what has become known as Formulation #1: “The purpose of the gTLD Whois service is to provide information sufficient to contact a responsible party for a particular gTLD domain name who can resolve, or reliably pass on data to a party who can resolve, issues related to the configuration of the records associated with the domain name within a DNS nameserver.” Id.

Because ICANN has come out supporting the more narrow interpretation of WHOIS, it is possible that the registries and registrars may limit the information provided therein. Such limitations could impact brand owners and law enforcement as they attempt to track down domain name registrants.

Although ICANN’s WHOIS task force has agreed on the purpose of the WHOIS information, there are currently no proposed changes regarding how the WHOIS information is displayed or what is retained. At this point, it would appear that the Task Force’s vote has done nothing more than give a nod of acquiescence to privacy shields (discussed further below) as organized by registrars and third parties.

What are some solutions for maintaining information access?

Follow the EU and Canadian model
The “.eu” and “.ca” ccTLD registration authorities, while gathering the data necessary to track down a registrant, should the need arise, are choosing to publish (or to recommend publishing) only limited information for each registrant on a publicly accessible database. ccTLD stands for “country-code top-level domain.” The “.eu” ccTLD stands for the European Union; the “.ca” ccTLD is for Canadian domain names. The full information is available on an as-needed basis to those who have demonstrated a need to know.

This solution offers the greatest measure of privacy protection and offers the greatest level of difficulty of access for intellectual property interest holders. Presumably, law enforcement would have the access necessary to track down Internet criminals.

Utilize a tiered system
Some creative thinkers have proposed a tiered accessibility system, where certain groups of individuals can purchase or simply have more access than others. One public forum outlining a tiered plan can be found at http://www.thepublicvoice.org/news/tf2suggestions.html (last visited February 15, 2006). In some proposed systems, the “average” user accessing a WHOIS database would see minimal contact information, perhaps only a shielded email address or link. In some systems, people who have been previously screened as requiring “extra” access, such as law firms or intellectual property interest holders, can use passwords to access more in-depth contact information. Finally, law enforcement would have all access for the purpose of tracking down crime.

Some problems with this suggested approach include: delegation of the operation of a complex, tiered system; determination as to who should get increased access and for what purpose; and ability to abuse the system.

Utilize graphics and/or verify the requestor
One private registrar, Name Intelligence, runs a complex WHOIS system at http://www.domaintools.com/. This search engine has several protective features: 1) complex software filters out most bot and automated queries, 2) multiple queries from one IP address are subject to authentication of the user, 3) WHOIS records are displayed with the registrant’s email address displayed as a graphic file so that it cannot be read by bots, and 4) some advanced search services are available only to registered users.

While this approach is a very advanced, highly technical and effective solution to spam problems, it doesn’t address Internet anonymity concerns or the needs of some individuals to remain private. Its effectiveness is further limited when other WHOIS information providers do not employ the same access controls.

Permit/require identity shields
An approach currently offered by many domain name registrars is, upon payment of a fee, to substitute their own contact information in the WHOIS record for a domain name. One such registrar, GoDaddy.com, offers this service for a nominal fee. See https://www.godaddy.com/gdshop/dbp/landing.asp?se=%2B&ci=257 (last visited February 15, 2006). This information often will also include a unique identifier, either the domain name itself, or another string of characters that links the domain name back to the registrant’s true identity. Upon a request from a court, law enforcement or an arbitration provider, some registrars will disclose the registrant’s information to the party authorized to receive it. Other registrars have chosen to simply pass along communication to the registrant, maintaining the privacy shield while passing along relevant communication. In either case, the necessary contact is made, and the identity of the registrant is private until such a time as it needs to be disclosed.

One drawback to this particular approach is that intellectual property owners do not typically get access to the registrant information in this scenario. This can present a problem when attempting to name defendants in lawsuits or arbitration complaints and can frustrate service of process.

Conclusion

The question “Who is right about WHOIS privacy?” has no easy answer. It seems that those with the intent to use the Internet for harassment or harm stay just ahead of the developments needed to impede their progress. The proposals presented each provide solutions to some of the problems, but it seems that no solution provides a satisfactory answer to all. Although ICANN’s WHOIS Task Force has voted to approve a statement of the purpose of WHOIS, it is unclear how the vote will accommodate the stricter data privacy laws of the European Union and Canada, if at all. At this point it seems the greatest impact of the vote was to confirm that the use of privacy shields are permitted for the generic TLDs. This may require trademark holders and law enforcement to seek newer and more creative ways to access the information they need.