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What Are The Trademark Symbols – ®, TM, SM – Which One Should You Use?

Trademarks

There are three trademark symbols. They have different meanings and uses. On the other hand, they share the same purpose – to let everyone know that you either have a Federal trademark or that you are claiming trademark rights in your brand.

The three trademark symbols are:

  1. the letters TM
  2. the letters SM, and
  3. the letter R in a circle – ®

Knowing which symbol to use is important to preserve your trademark rights. This post explains them and their proper use in everyday language.

The Three Trademark Symbols

The letters TM are for unregistered trademarks (marks for products like shoes or computers).

The letters SM are for unregistered service marks (marks for services like legal services).

The ® is for Federal trademarks (trademarks or service marks registered with the U.S. Patent and Trademark Office).

The ® is reserved for Federal marks only – after you have a Federal registration. This means you've filed an application and received a registration certificate from the U.S. government. In contrast, the TM and SM symbols are used with unregistered marks, trademarks registered with a State, and while an application is pending at the U.S. Patent and Trademark Office.

Quick note: In the trademarks industry, we use the word trademark to refer to both trademarks and service marks. We don't usually refer to service marks very often. So, you can use the TM symbol for both.

Why Use Trademark Symbols Anyway?

There is no requirement to use any trademark symbol. It is a good idea to use the right ones, nonetheless. Here are a few reasons why.

Using the TM, SM, or ® lets competitors know that you claim some trademark rights, which dissuades copycats. Use of the ®, in particular, lets everyone know you have a Federal trademark, which entitles you to recover lost profits and money damages without having to prove intentional copying.

Basically, in Court, no one can feign ignorance of a Federal trademark when the ® symbol is used correctly.

Warning: You are not allowed to use the ® symbol before you receive your Federal registration. If you do, that can be grounds for the U.S. Patent and Trademark Office to reject your trademark application because of a violation of federal law.

The Most Important Takeaways

  1. Use the ® with Federally registered marks only.
  2. Use TM or SM for unregistered marks, including applications still-pending in the U.S. Patent and Trademark Office.
  3. Use TM for marks that brand goods and SM for marks that brand services. If your mark brands both products and services, use TM.

…………………………….

By Michael Kondoudis
Michael E. Kondoudis is an award-winning trademark attorney and the principal of The Law Office of Michael E. Kondoudis, a trademark and patent law firm headquartered in Washington, DC. If you are serious about protecting your business and brand, we invite you to request a brand protection strategy session.
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Online Reseller Keyword Advertising Liability 101

Online Reseller Keyword Advertising Liability 101Online reseller advertising trademark liability arises when advertisers or resellers either resell or facilitate the resale of a trademark owner's branded products or when advertisers compare their products to their competitor's products by referencing a protected trademark in their online ads. But, under the first sale doctrine, a trademark's owners' rights do not extend past the first sale of goods bearing its mark. Any distributor who resells trademarked goods is not liable for trademark infringement as long as the trademarked goods it sells are genuine (Polymer Technology Corp. v. Mimran (1992)). In essence, the first sale doctrine protects the secondary resale markets.

Trademark owners can assert several trademark claims in advertising, including claims for infringement, contributory infringement and dilution. Trademark infringement occurs when a person uses another's mark or a similar mark in a way that is likely to confuse consumers. Dilution occurs when a person uses a trademark that is identical, or nearly identical, to a famous mark in a way likely to tarnish the mark or blur its distinctiveness.

In Mark Kay Inc. v. Weber, 2008, which I summarize below, the defendant's sold Mary Kay goods on the secondary market as resellers. The Court noted that the first sale doctrine did not protect those who sell trademarked goods that are materially different then those sold by the trademark owner. (Mary Kay argued that the goods sold by the defendants were not genuine since they were past their expiration dates). The Court relied on a previous ruling in Warner-Lambert Co. v. Northside Development Corp. (1996), where the trademark holder only had to show: a) that it had established legitimate quality control procedures; b) that it abided those procedures; and c) that non-conforming re-sales diminish the value of the mark.

While the courts have applied the first sale doctrine inconsistently, a framework has at least begun to develop that provides guidance to Internet retailers. Recent court decisions have helped clarify what activities, or lack thereof, are considered to be infringement (or contributory infringement) for Internet resellers of goods, in comparative advertising and even for third party service providers.

The Nominative Fair Use Defense

The nominative fair use defense basically applies when you use so much of a protected trademark as necessary only to identify another good or business. In terms of Internet resellers, the nominative fair use doctrine permits a reseller of branded goods to use the brand name in its advertising (Pebble Beach Co. v. Tour 18 I Limited (1998)). However, the right of fair use is not unlimited, and any nominative fair use cannot suggest “affiliation, sponsorship, or endorsement by the mark holder.” Fair use will only apply when you use so much of the owner's mark as necessary to identify the products and nothing more. The cases that are summarized below will illustrate how this defense has been applied recently in the context of keyword advertising.

Keyword Advertising Trademark Infringement

If you use keywords that are registered trademarks of some third party in any Internet advertising, or when optimizing your website, you can potentially be liable for keyword trademark infringement. The problem, as with many other areas of Internet law, is that this issue and any potential liability for keyword trademark infringement is far from clear. Trademark laws are interpreted and applied inconsistently by the courts. Specifically, the Courts have been inconsistent with how they have analyzed the two key elements of trademark infringement: (1) whether the sale of a trademarked term as a keyword is a “use in commerce” as defined under the Lanham Act and (2) whether the use of a trademark as a keyword is likely to cause consumer confusion.

Using Keywords in Commerce

Both types of trademark claims stemming from keyword advertising require “use in commerce.” This means that a person must use the allegedly infringing or diluting mark as a keyword in connection with the sale, distribution, or advertising of goods or services. Most courts hold that sale of a keyword that is also a trademark qualifies as a trademark “use in commerce.” The decision involving Google (2009) has been the pivotal case regarding this issue. The federal district court (2nd Circuit) held that a computer program generating pop-up advertising based on the terms typed into a browser was not a use in commerce. The appellate court reversed this decision and found that the display, offer and sale of a trademark by Google's AdWords and other Keyword advertisers are in fact a “use in commerce.”

Lesson: Many other courts following the decision in the Google lawsuit will now probably find that your purchase of a keyword which happens to be a protected trademark does qualify as a “use in commerce.” This means you're not automatically liable for trademark infringement by purchasing and using a keyword that is a trademark. What it does mean is that the use in commerce element of trademark infringement is probably satisfied and any claim won't just be left to die for failure to satisfy that single element.

Keywords Causing Consumer Confusion-The Initial Interest Confusion Doctrine

It remains unsettled whether the use of a registered trademark in keyword advertising creates a likelihood of confusion. Many plaintiffs in trademark infringement actions involving keyword advertising often attempt to meet the likelihood of confusion element by relying on the Initial Interest Confusion doctrine. Under this doctrine, although the consumer is not ultimately confused, a plaintiff may suffer harm because the consumer was initially confused and was therefore led to the plaintiff's competitor's website as a result of that initial confusion.

For example, suppose another business has purchased a competitor's trademark as a keyword and then used it in a pay-per-click advertising campaign. The consumer actually clicks on the link in the ad and is directed to that company's website, not the website of the trademark owner. While browsing that company's website, the customer buys a product that competes directly with the company who has trademarked the keyword being used to sell competing products. The customer is likely not confused when the purchase is ultimately made. But, the initial confusion led the consumer to the competitor's website because the competitor used the trademark of the original company. The result is a lost sale for the trademark holder because it did not have control over its trademark.

Some courts hold that the Initial Interest Confusion Doctrine may not be appropriate in e-commerce. They have reasoned that Internet users are very aware of the nature of pay per click keyword advertising and are free to hit the back button on their browsers. However, other courts have actually held that Initial Interest Confusion Doctrine can form the basis of a trademark infringement claim. Hearts on Fire Company, LLC v. Blue Nile, Inc. is one example. A federal district court in Massachusetts found that Blue Nile's purchase of the “Hearts on Fire” trademark as a keyword which triggered Blue Nile's advertisement, together with the search engine's organic results, amounted to trademark infringement. The infringement was based on Initial Interest Confusion.

Case Summaries

The following case summaries examine three important cases involving keyword advertising. They each have helped form guidelines for Internet retailers, including resellers, and service providers regarding keyword advertising. The main points to take away from each case are included in the “Lessons” paragraph after each summary.

Lesson #1: No Trademark Infringement for Internet Service Providers!

Tiffany (NJ) Inc. & Tiffany and Company vs. eBay, Inc. (2004). This case serves as an example of an analysis of direct and contributory trademark infringement with Internet service providers, such as auction sites. Tiffany sued eBay in 2004 in a New York federal district court claiming that trademark law required eBay to monitor the goods sold on its site for counterfeits. Specifically, Tiffany argued eBay was liable for contributory trademark infringement due to eBay's lack of quality control in policing counterfeit Tiffany items sold through eBay's site. Tiffany also claimed that eBay's purchase of internet advertisements that included the Tiffany trademark constituted direct trademark infringement. Finally, Tiffany claimed that the sale of counterfeit goods on the site amounted to false advertising. The district court ruled in July of 2008 that eBay's use of the Tiffany trademark in its product listings was a protected fair use and that eBay had no such duty to monitor each single good for potential counterfeiting.

Main Points:

  • A third party provider, such as an auction site, is not liable for contributory infringement unless the service provider continues to provide its services to a specific individual or business whom it knows, or has reason to know, is engaging in infringement;
  • The court left open the issue of whether eBay's ads amounted to false advertising. So, this may be an avenue future plaintiffs use to attack service providers. Of course, a different court of law may not follow this decision, or may not follow certain decided issues. But, we can at least take the key points from this case and use them as solid guides, as future courts will;
  • This court was one of the first, if not the first court, to apply the normative use defense to keyword advertising. This court's reasoning behind their decision suggests that retailers and affiliates asserting a fair use defense might be able to turn to this decision as authority;
  • The court's decision extended the nominative fair use defense to keyword triggers. Of significant note is that one of eBay's ads in question was triggered by the keyword “tiffany” and included “tiffany” in the ad copy. (The ruling does not address what happens if the trademark acts as a trigger but does not show in the ad copy).
  • In the end, the main lesson is probably found in the following direct quote made by the court: “contributory liability may arise where a defendant is (as was eBay here) made aware that there was infringement on its site but (unlike eBay here) ignored that fact.” Tiffany did sent cease and desist letters to eBay and eBay did then respond promptly and started filtering the content.

In November of 2010, the U.S. Supreme Court rejected Tiffany's appeal. Thus, the decision by the 2nd Circuit appellate court will stand and will be authoritative law to the lower district courts within that Circuit and will provide guidance to other district courts.

Lesson #2: No Trademark Infringement for Comparative Advertising

Nautilus Group Inc. vs. Icon Health & Fitness, Inc. In a comparative-advertising case, Icon Health's used Nautilus's Bowflex trademark in a sponsored ad titled “Compare CrossBow to Bowflex.” Nautilus sold the Bowflex exercise equipment and defendant sold Crossbow equipment. Nautilus filed suit in 2002 alleging patent infringement and trademark infringement, false designation of origin, and federal and state dilution, among other claims. The court determined that use of the mark by Icon Health did not infringe or dilute Nautilus' mark.

The description that followed the Icon Health's ad title was viewed by the court as only an invitation to compare the two products, and to summarize the benefits of Icon Health's product versus Nautilus's Bowflex. The court granted defendant's motion for summary judgment (dismissal) on plaintiff's federal and state dilution claims relating to defendant's CROSSBOW mark and to defendant's purchase of the keyword “BOWFLEX INFORMATION.” Basically, the court rejected Nautilus's argument that defendant “actually used the Bowflex trademark.”

In terms of the keyword advertising, the court initially stated that it was clear that defendant purchased the keyword “Bowflex” only in the context of comparative advertising. Specifically, searches for this keyword returned sponsored links titled “Compare CrossBow to Bowflex.” The text following this title “asked users to compare the two machines, and summarized what the CrossBow machine had to offer.” The court also noted that the URL was listed as “http://www.crossbow.com.” The court, which cited the Ninth Circuit's decision in Playboy v. Welles to reach its decision, “explaining that such uses do not create an improper association between a mark and a new product, but merely identify the trademark holder's products.”

Main Point: Comparative advertising using protected trademarks as keywords is permitted so long as it is done fairly and without creating any type of consumer confusion.

Lesson #3: Trademark Infringement Possible by Internet Resellers

Mary Kay, Inc. v. Weber (2008). Probably the most informative of these cases has been a recent case where the beauty supplier Mary Kay sued an Internet reseller of Mary Kay's products for trademark infringement. In this case, the fair use defense did not apply and the Internet reseller was found liable for trademark infringement. The Mary Kay case is very illustrative to resellers because the reseller here was actually found liable for infringement even though it did not intend to mislead or confuse its customers. The defendant's website carried the following heading: “This Company has been established by former Mary Kay Consultants who are assisting consultants to liquidate their inventory. We offer Mary Kay products at a great discount. Most of our items are discontinued, past shelf life or expired, which is why we can offer you such great prices.”

Defendants began selling inventory on eBay through the website “marykay1stop.” Mary Kay demanded that the defendants cease using its Mary Kay trademark as part of the store name and remove all copyrighted Mary Kay photographs. Defendants removed the copyrighted materials and changed the name of the eBay store to “Touch of Pink.” They also created a website at “http://www.touchofpinkcosmetics.com” through where they continued to sell Mary Kay products. They also still used the Mary Kay name on these sites to identify the products that were being sold. Mary Kay ultimately sued the operators of the website for trademark infringement, among other claims.

Keyword Triggered Ads-The court examined whether the text of defendant's keyword-triggered sponsored ads improperly suggested an affiliation or sponsorship with Mary Kay. The subject ads read: “Mary Kay Sale 50% Off: Free Shipping on Orders over $100 Get up to 50% Off-Fast Shipping… ” The court initially commented that the wording “Mary Kay Sale 50% Off” does “imply that May Kay is hosting the sale.” The court then compared the text to other ads that had been found not to suggest any affiliation or sponsorship by previous courts. One of these courts, Brookfield Communications v. West Coast Entertainment (9th Circuit) described a hypothetical banner ad that would be considered permissible. The banner ad contained the following text: “Why pay for Moviebuff when you can get the same thing here for FREE?”

The Mary Kay court stated that if the ad only stated “Moviebuff 50% Off,” the line between the advertised service and the mark “would be far less clear.” In evaluating defendant's ad, the court found that “[o]ne could easily conclude from this ad that the entity offering the sale either is Mary Kay, or has Mary Kay's approval.” The court decided that the issue of whether fair use protected the use of the Mary Kay trade mark in the text of the sponsored ads presented a genuine issued to be determined by the court.

Use Directly on Website-The court did not apply the fair use defense regarding Weber's use of the Mary Kay mark on her website, the court declined to decide whether such uses constituted nominative fair use. The court instead applied the traditional likelihood-of-confusion factors to determine whether the website created a likelihood of confusion as to affiliation or sponsorship with Mary Kay. The court found that six of the seven factors favored Mary Kay. These factors included that the marks used and products sold by Weber were identical to Mary Kay's marks and products; the identities of potential purchasers were “likely identical or at least very similar”; the parties used the same advertising media; and there was some evidence of actual confusion in the form of emails with one individual and “legally relevant” confusion from an otherwise flawed survey.

IntentThe final factor the court considered was the defendant's intent, which was “neutral” according to the court. Defendant had placed a disclaimer on their website stating that the website was not endorsed by or affiliated with Mary Kay. But, the court noted that it was not prominent and did not even appear unless a user clicked on an “About Us” link.

Conclusion

The court denied defendant's nominative fair-use defense regarding direct use of the mark on the website and the case proceeded to trial. Ultimately, a jury found for Mary Kay on its trademark infringement and unfair competition claims. The court clarified that the defendants could only use so much of the protected trademark as was necessary to identify the genuine, non-expired products defendant was selling. However, the court refused to prohibit defendants from purchasing Mary Kay's trademarks as search-engine keywords. It did not specifically comment on use of the Mary Kay trademark in the keyword-triggered sponsored ads. But, the court decided before the trial to allow the fair use defense to be analyzed in this context (instead of outright rejection of the defense). Also, direct comments by the court during the trial specifically suggest that keyword advertisers could use trademarks in keyword-triggered ads if not used in a way to suggest affiliation with the trademark owner.

Main Points:

  • The Court concluded that purchasing keywords which are trademarks does not by itself bar the fair use defense (the Court believed that users of a search engine would not assume that sponsored link advertisers were affiliated with a trademark entered as a search term);
  • The Court examined the text of the Sponsored Ads to determine whether it suggested affiliation with or endorsement by Mary Kay;
  • There is no absolute right to use a trademark owner's marks to resell its ed products as such sales may be limited by exceptions like the “materially different” standard for expired products;
  • Text of keyword-triggered ads should be more of a comparative advertisement in order to be able to assert the nominative fair use defense, at least according to the court in the Mary Kay case;
  • Inconspicuous use of a disclaimer on a reseller's website, including a disclaimer accessible only from a link on the site's main page, is not sufficient to avoid a likelihood of confusion.

Infringement from Metatags

Meta elements provide information about the content contained on a given webpage. Usually, they are included to help search engines index the pages properly. A meta tag is a coding statement in the HTML that describes some aspect of the contents of a webpage. The information that you provide in a meta tag is used by search engines to index your webpage. Keyword meta tags list the keywords or keyword phrases that describe the contents of the webpage. These tags are placed near the top of the web page as part of the heading.

As any SEO guru would tell you, proper meta tags can help your website obtain higher search engine rankings. But, if you use any protected trademarks of any of your competitors as metatags, you might be liable for trademark infringement. Infringement can occur in this situation because your website was listed in the search engine results by using someone else's protected mark. There are different kinds of meta tags, but the most important tags used for search engine indexing are keyword meta tags and the description meta tags. The description meta tag includes a brief description of the webpage. Potential customers of your competitor will naturally use the brand name or trademark as a keyword when they use search engines to find that competitors' products. So, if you try to achieve rankings by essentially diverting your competitor's customer stream, you could do so at your own peril.

Bottom Line Legal Guidelines

There really is no uniform standard regarding infringement for comparative or trademark keyword advertising. One court might view some factors as more important than another court will. However, the following general principles have seemed to emerge from each of these cases (and others) and should therefore be followed by your business:

  • The courts have generally applied the fair use defense in evaluating claims of trademark infringement with keyword advertising and comparative advertising is generally permitted;
  • The first sale doctrine does not absolutely apply, as in cases where the material nature of the good may not be the same as the original-i.e. expired goods;
  • The courts have looked predominantly at the sponsored links and the wording of the relevant ad to find any suggestion of affiliation or sponsorship;
  • Using Disclaimers may help prevent liability, but they must be prominent and used properly (we discuss using website disclaimers in detail later);
  • Determination of any trademark infringement by providers, like auction sites, has typically relied heavily on whether these providers have received notice and then subsequently taken down the infringing materials;
  • The courts have favored service providers who do more than is legally required in dealing with trademark infringement claims. (The court in the eBay case noted eBay's efforts at combatting counterfeiting and how it worked in good faith with third party owners to prevent infringement). This means if you're a provider, you should have a comprehensive mechanism in place to combat counterfeit goods and infringing uses of another's trademark on your website or platform;
  • Using a someone else's trademark as a meta tag may result in trademark infringement;
  • Do not use the trademark as a source identifier on the packaging of any goods your business actually provides unless you're an authorized reseller of those goods;
  • Do not display the trademark (keyword) on your website or any other promotional materials used by your business.

Ultimately, the lack of appellate court decisions on this issue and the inconsistent analysis of the district courts who have decided this issue make it difficult to develop an effective strategy for reducing the risk of trademark liability. This means that all businesses employing trademark keyword advertising methods should proceed at their own risk. Accordingly, you should probably avoid using keywords that are known trademarks of someone else entirely to be completely safe.

You should stick with keywords natural to your own business or related to the goods/services your business offers or is reselling. Content relating to your business should always be used over obvious trademarks in any keyword advertising campaign.

This article was written by Philip A. Nicolosi, J.D. Mr. Nicolosi provides legal services through his law firm, Phil Nicolosi Law, P.C., focusing on startup and small business law, Internet & technology law and commercial transactions.

Mr. Nicolosi serves as a trusted advisor to numerous startups and small to medium sized businesses. This includes representation for a wide range of business law matters including business organization, corporate/LLC governance, regulatory law, contracts and transactions and most other matters outside of litigation. Mr. Nicolosi provides guidance with e-commerce, Internet marketing and technology-related legal matters. He also assists startup technology companies with seed financing, venture capital and exit transactions.

Mr. Nicolosi is also the founder of InternetLegalArmor (www.internetlegalarmor.com), an automated custom website legal document solution.

Visit Phil Nicolosi Law now, or contact Mr. Nicolosi directly by sending an email to info@philnicolosilaw.com

Article Source: http://EzineArticles.com/8602539

Website External Links and Framing Legal Guide

Website External Links and Framing Legal GuideIf you operate a website, are you aware of the ways in which website operators can become liable for use of external links? Traditionally, website operators have not been held liable for merely placing an external text link on their website. But, doing more than simply placing a text link on your site and your website content may in many instances result in liability. The following legal guide will introduce you to basic liability resulting from misuse of external links and for framing.

Types of Links & Framing

Before I discuss external links and framing liability, you should understand the basic types of website links if you don't already. There are two basic types of external links. Text links (embedded links in text) are called hypertext reference (“HyperREFerence”) links. These links can lead to a different point on the same page, or to a different page in the same site. Of course, hypertext links can link to third party webpages also. A graphic may serve as a hypertext link, but usually these links commonly appear as underlined, capitalized or otherwise prominent text.

The second type of link is an Image (“IMaGe”) link. An IMG link directs the web browser to retrieve an image from a separate image file. This type of link can reference a file from within a website, or from a third party web site. For example, using an IMG link, a web page could direct the visiting browser to retrieve a protected image, video or other content contained on another website and show it on the original website. This presents a seamless integration of web content even though they are not from different websites.

This process, linking and incorporating the content (text, video, audio file, etc.) of another website is also known as “in-line liking.” For instance, a video link embedded on your website is simply an in-line link. An in-line link displays, or “frames” the third party file on the original web page. When the user visits the original page, the HTML code on the original page direct the user's browser to the file located on the third party webpage.

“Framing” is a practice where one website uses frames to incorporate the content of another websites into a browser window along with the content from the original website. The website doing the framing may post navigation tools, text, trademarks and/or advertising along with the framed webpages. The more the framed website is integrated into the original website users may become confused over affiliation, endorsement or sponsorship. Unauthorized framing has been challenged under a variety of legal theories, including copyright and trademark infringement, unfair or deceptive trade practices, passing off, false light and false advertising among others.

Meta tags and keywords are considered “de facto” links as well. (Use of meta tags and keywords can lead to claims of trademark infringement).

Possible Liability For Using External Links

A. Copyright Infringement

Most external links are lawful. Generally, permission is not needed for a regular hypertext link to the home page of another website. There is substantial case authority that provides that traditional hyperlinking is not direct copyright infringement because there is no copying or display involved.

For example, in a key decision that has helped shape the law, the court in Ticketmaster Corp. v. Tickets.com, Inc. (2003) stated:

“… hyperlinking does not itself involve a violation of the Copyright Act (whatever it may do for other claims) since no copyright is involved. The customer is automatically transferred to the particular, genuine Web page of the original author. There is no deception in what is happening. This is analogous to using a library's card index to get reference to particular items, albeit faster and more efficiently.”

However, using external links on your website may create legal liability in some cases. External links can be unlawful when they i) cause consumer confusion; ii) encourage or facilitate illegal copyright infringement by others; or iii) violate other laws. In particular, copyright infringement (direct, contributory and vicarious infringement), trademark infringement and dilution, passing off and misappropriation are the main areas of liability. Defamation may also come into play.

1. Contributory Copyright Infringement

Contributory copyright infringement can occur by providing links to websites that display infringing material and actively encourage or facilitate the use of those links in various ways.

Instructions on following links and encouraging visitors to use them or including software that facilitates downloading infringing copies of content (such as peer-to-peer software) or including software that assists the downloading of material from remote sources, are all considered material contribution to copyright infringement.

In the cases that have decided this issue, the common elements have been that a middle party makes available a list of links to third parties who willingly make copyrighted works available for viewing or downloading. Websites don't directly host or re-transmit the protected content, but they do provide links to materials made available by others.

Contributory infringement occurs when an individual or business knowingly induces, causes, or materially contributes to the infringing conduct of others. The essential elements of this claim are knowledge of and participation in the infringement. In establishing a claim of contributory infringement, a copyright owner must establish the website had requisite knowledge and participation. The knowledge aspect can be established if the website has been put on notice, such as by receiving a cease and desist letter from the copyright holder, or even by allegations made in a pending lawsuit against the website. The participation aspect can be established by placing a link which facilitates the user going to another website containing the infringing items.

-EXAMPLE: Intellectual Reserve, Inc. v. Utah Lighthouse Ministry, Inc. (1999): A website (Intellectual Reserve) posted copies of a church's copyrighted handbook and provided links to other sites that contained infringing copies of the handbook. In this example, the defendant knew and encouraged the use of the links to obtain the unauthorized copies. This was held by the court to constitute contributory copyright infringement. The court issued a preliminary injunction directing the defendants to remove statements identifying the domain names of websites containing the handbook. This was held by the court to constitute contributory copyright infringement. The court reached this result despite the fact that the defendants' website did not contain any direct links to the infringing websites.

Intent and context matter.

Case law has shown that defendants have been found liable because they did more than just post links. The intentional encouragement of copying or downloading of protected materials is a liability trigger. Context can make it clear that a link is posted merely for its informational (indexing, referencing) content. Without active encouragement of use of illegal content, then “aggravating” factors are missing and courts have not imposed liability. In cases involving informational (“pure speech”) links, the elements of material furtherance of infringement (contributory infringement) and financial gain from infringement (vicarious liability) likely don't exist.

But, contributory infringement is subject to reasonable limits.

-EXAMPLE: Bernstein v. J.C. Penney, Inc.: A photographer sued the retailer J. C. Penny for a link on its site to a movie database. This link in turn linked to a site in Sweden that allegedly infringed the photographer's copyright in a couple of photographs.The court denied the plaintiff's motion for a preliminary injunction, and the plaintiff dismissed his case. Although a final resolution was not reached, this case suggests that claims of contributory infringement cannot be remote. There must be some reasonable limits in terms of third party linking to infringing materials.

2. Deep Links

Deep links direct the user to an image or webpage other than the homepage of a third party website. Many websites post introductory materials including third-party paid banner advertisements and special promotions or teasers relating to their own site on the home page. Businesses expect that most website visitors will find those advertisements before going further into the website's other pages. Deep linking and bypassing the home page of some other website has caused lost revenues. Of course, this has led to lawsuits. But, deep linking to interior pages of a website by itself is not copyright infringement when the copyrighted materials are not shown or displayed on the original website.

Deep linking by itself without confusion of source is not unfair competition. (Ticketmaster Corp. v. Tickets.com, Inc.). If deep linking is somehow done in a way that would confuse viewers as to affiliation, sponsorship or endorsement by the other website (i.e. trademark infringement), this could trigger a claim. For example, a deep link that says “Click Here For More Information,” which then leads viewers to a page on a competitor's website containing information about a similar product.

3. In-line Links & Framing

Can I embed links to videos and use “In-line” Image links?

Case law has held that In-line linking and framing by itself is not direct copyright infringement. The content is not a display or distribution in violation of copyright law.

In-line linking and framing may cause some users to believe they are viewing a single webpage (seamless content). But, the Copyright laws do not protect a copyright holder against acts that cause consumer confusion. Without causing consumer confusion, in-line linking and framing is within the law (although it's considered bad web etiquette).

In order to prove direct copyright infringement, a plaintiff must first prove that the defendant copied the protected work. A plaintiff must first establish: (1) ownership of the allegedly infringed material and (2) violation by the alleged infringer of at least one of the exclusive rights granted to copyright holders. Many of the claims for direct copyright infringement for “unauthorized” use of in-line linking and framing have gone nowhere. This is because there was no actual copying and display of the infringing content.

-EXAMPLE: Perfect 10, Inc. v. Amazon.com, Inc., et al.(2007): In what was the first court to provide an actual decision regarding the use of framing, the Ninth Circuit Appellate Court held that framing infringing images found on third party websites via in-line linking is not direct copyright infringement. Google presents a framed page in its search results where the bottom half comes directly from the third party web site where the image is actually found. The court used the “server” test and decided that a website that “frames” content by providing an in-line link to the copyright holder's site is not a public display or public distribution. The framed content is not being stored on the framer's server. The court also found that Google did not commit direct copyright infringement by providing “in-line links” to third party websites that contained infringing images. The Court stated that providing a link to a third party website that displays infringing images, by itself, does not make the original website liable for copyright infringement.

The Court also laid out a new test for secondary liability on the Internet. A computer system operator must have “actual knowledge that specific infringing material is available using its system” and “continue to provide access to infringing works.” This is true despite the fact the provider could take simple measures to prevent further damage to the copyright holder. The court struck down the vicarious liability infringement claim due to Google's use of in-line links because Google had no ability to control the third party websites or compel them to remove infringing images found on those sites.

Framing and Inline linking of third-party content into another web page can potentially raise the following issues: trademark infringement, passing off, defamation and possibly copyright infringement for creating a derivative work.

Framing and in-line links pose the same trademark and derivative work concerns. Framing might be viewed as more problematic when it comes to trademark infringement. A viewer could easily conclude that all the material on the framing website belongs to that site. But, you cannot in-line link or frame third party web-content and always escape liability. Even though you are not directly copying the content, your framed page along with the content from an external framed page could be viewed as an unauthorized modification of the content. In terms of potentially creating a derivative work, this really is a grey area and depends on the context and nature of the framing. So far, the issue hasn't been directly decided, but many intellectual property attorneys feel this practice could result in a derivative work.

-EXAMPLE: In Futuredontics Inc. v. Applied Anagramic Inc. (1997): Applied Anagramic (Defendant) operated a web site and divided its pages into frames. Defendant's website contained an unauthorized link to the Futuredontics website that caused copyrighted materials on plaintiff's site to appear within one of the frames of Defendant's website. The problem was that the rest of the page was filled with content supplied by Defendant, including its logo and information about its business operations. The court found that Futuredontics had failed to show that it was or would be injured by defendant's conduct. Absent the requisite showing of injury, plaintiff was not entitled to injunctive relief. However, the court left the door open for the creation of a derivative work. The district court would not dismiss the claim holding that the defendants conduct may create an unauthorized derivative work.

B. Trademark Infringement & Dilution

Any link (in-lining or framing) that falsely leads the viewer to conclude that the web page (owner) is affiliated, endorsed or sponsored by the trademark owner could lead to a claim of trademark infringement.

Trademark infringement basically occurs when someone uses a mark of another in such a way that creates a likelihood of confusion. Using an image link or framing that places another party's trademark or logo on your web page may cause confusion.For example, the use of a company logo to link to the company's website could be trademark infringement. If the consumer is likely to believe that the third party business or website is associated with your website, it is infringement. As a general rule, a link that simply uses a text reference rather than a logo or trademark does not make any implication about affiliation.

The use of logos and trademarks as direct links presents an obvious problem. Using a trademark or logo can expose you to liability if a court finds that the reasonable consumer would likely be confused, given the facts. In addition, The Federal Trademark Dilution Revision Act (FTDRA) of 2006 provides owners of famous marks with protection against dilution by blurring and dilution due to tarnishment. Under the revised FTDA, the plaintiff only needs to show the defendant's mark is likely to cause dilution. Improperly framing content of another website may result in consumer confusion (direct infringement) and/or claims of dilution.

-EXAMPLE: Washington Post Co. et al vs. Total News, Inc. (1997): The website Total News was sued by the Washington Post and CNN. The plaintiffs claimed trademark dilution for the framing of the news pages of plaintiffs' sites in a frameset that contained TotalNews advertising. Plaintiffs believed viewers of Total News would be confused since the viewer would see the plaintiff's news pages within a Total News frame, but without plaintiff's banner advertisements. This case was settled without a decision, but Total News agreed to stop framing and to use text-only links.

-EXAMPLE: Hard Rock Cafe, Int'l, Inc. v. Morton (1999): Defendant installed a link on their website which contained the words “record store.” Clicking on this link took the user to the “Tunes” web page which appeared in frames on the defendant's website. Frames appeared above and to the left of the webpage content containing the Hard Rock Hotel logo. The court found that a likelihood of confusion arose from framing the website because the distinction between the two sources of material appearing on the screen was not clear. “Through framing, the Hard Rock Hotel Mark and the [infringing site] were combined together into a single visual presentation.” However, the court did state that framing is a flexible device that in some instances might provide a clear distinction between different sources of the content.

A direct link contained on an offensive or disparaging website (i.e. a pornographic site) could potentially trigger a claim for trademark tarnishment?

Rule: If no “reasonably prudent Internet user” would associate a trademark with the linked site, then this claim would likely fail.

-EXAMPLE: Ford Motor Company v. 2600 Enterprises (2001): Defendant's website contained a text link to Ford's homepage from the website fuckgeneralmotors.com. Ford sued for trademark dilution, trademark infringement, and unfair competition. The district court stated that linking by using a trademarked domain name in a programming code is not a violation of the Ford trademark nor is it dilution of the mark.

-EXAMPLE: Voice-Tel Enters., Inc. v. Joba Inc. (2003): A claim for tarnishment cannot arise from the use of a trade mark on a website containing a link to a potentially offensive site.

C. Passing Off

Using external links improperly may be “passing off” if a website uses links to suggest that its products are those of a more highly regarded competitor.

There are additional common law claims under state unfair competition laws, namely passing off, contributory passing off, reverse passing off, and misappropriation. Passing off occurs when someone or some business tries to pass off its product or services as a third party product or services (or as having some association or connection with a third party when this is untrue). So, for example, framing webpages of a competitor's website in a way that suggests your products are affiliated or made by the competitor.

1. Contributory passing off occurs when the defendant assists or induces another (typically a retailer) to pass of its product as the plaintiff's product.

2. Reverse passing off occurs when someone tries to pass off someone else's product as their own. If you pass off images or logos via in-line links or by framing within your website in a way that suggests affiliation, this could amount to reverse passing-off. This is basically where the work of someone else is passed off as your own. For instance, you could tell your viewers to click here to see some product examples of what you sell, but which are taken from a competitor's webpage, and then claim they are your products. This type of reverse passing off by using a link to pass-off another's work violates state unfair competition and/or unfair business practices laws.

D. Misappropriation

is unauthorized use of another party's property of funds for personal gain. This is yet another potential concern if your using an external link(s) in a manner that allows you to gain something of value.

E. Negligence

Linking to a source which turns out to contain misleading or which contains harmful information may cause liability for negligence. Even simple informational links posted with no particular commercial purpose could create risks under the theory of “negligent publication.” Carefully drafted disclaimers in an External Links Policy, as discussed below, can help advise your website viewers that you are not responsible for third party website content.

F. Defamation

A link to another's webpage or image could be defamatory. For example, “This mortgage broker ripped me off and lied to me.” The statement itself does not identify the party. The link (assuming it actually linked to someone's website or webpage) provides the context that turns the statement into defamation, however.

TIP #1: Use External Links Policy/Disclaimers!

Using a properly drafter External Links Policy, which is really just a set of disclaimers, can serve as a defense to liability for external links. The disclaimers can help protect your business against a claim that could be made by any users of your site. Posting disclaimers is not an absolute shield from liability. But, it does put users on notice that the business does not control or have any affiliation with the content of third party websites. It can also set forth a policy for placing links on your website. Properly drafted external links disclaimers can prevent claims by your website users.

Some websites post no specific disclaimers, but instead display a notice stating something like “by clicking on this link, you will be leaving this web site and will be directed to a third party site, which we have no control over the content.” This operates as a disclaimer. You could also choose to use a link prominently located on your website leading to a separate page with the policy. Using a link labeled External Links Policy” is customarily how this should be handled. But, any link should be prominently located on your website and not hidden.

The best practice is to stick any external links disclaimers on a separate disclaimers page and in the website terms of use. You can then make your website visitors register and click to agree to the website terms before accessing any meaningful portion of your website.

TIP #2: Post a Hyperlink Policy On Your Site!

Your website should contain internal policies concerning who may link to your website and the manner in which it must be done (i.e. a “Hyperlink Policy”). You should also use a link exchange or hyperlink agreement whenever another website wants to do a link exchange with your site. This type of agreement should be used regardless of whether your business is being compensated for placing the link. The most important item to address in such an agreement is indemnification. I talk more about Indemnification later, but it basically is a way to get compensated by the owner of another website for liability your business incurs.

If there is infringing material on the site, the linked-owner is required to indemnify (reimburse all financial damages and costs incurred due to the link on your site) and defend your business against any claims. Indemnification should cover any claims of libel, violation of right of privacy, plagiarism, copyright or trademark infringement and any other claims or suits based on the content contained on the third party website.

Any website requesting a link should also provide a warranty and representation that the website operator(s) has the right to display all materials contained on the website. None of the content on the third party site should infringe on the rights of others including but not limited to rights in trademarks, copyrights, and patents. Further, the operators should warrant and represent that the third party website does not contain any obscene, vulgar, defamatory or any other illegal material.

Summary: External Links & Framing Guidelines

    • Avoid using links that suggest affiliation or sponsorship with some third party. Any link that falsely leads the viewer to conclude that the web page author is affiliated, approved, or sponsored by another website could lead to a claim of trademark infringement. This means avoid using links which are trademarks or logos. As a general rule, a text link that simply references a third party name (or product) rather than a logo does not suggest affiliation, endorsement or sponsorship;
    • Avoid using deep links that cause confusion as to source or affiliation with a third party website;
    • Avoid framing when doing so will cause consumer confusion. Including protected content or a third party trademark in the frame may cause confusion. If the frames are used to either make your website content look like it belongs to the linked site, or to make the linked site content look like it belongs to you, this could trigger a claim. You should clearly indicate third party ownership of any content you display from a framed third party website;
    • Framing content from other webpages in such a way that omits their banner advertisements and other ads;
    • Avoid using links (in-lining or framing) that pass off the goods or services of another company or website as your own;
    • Avoid using links that pass off your goods or services off as that of one of your competitor's;
    • Avoid websites that are “linking” sites. These websites provide access or unauthorized links to other websites where pirated sporting and pay-per-view events are hosted, where movies (or trailers) can be downloaded, or that contain illegal content such as pornography;
    • Avoid Defamatory links (i.e. “This guy ripped me off” where the link leads to a website operated by or involving the person referred to as “guy”);
    • Check the websites your links lead to regularly. Website owners change and website content may change over time;
    • Use an External Links Policy on your website and use a Hyperlink Agreement for link requests;
  • Obtain Permission to link to another website.The simplest and most direct way to prevent claims for infringement is to obtain permission. Some websites solicit or encourage links, and even make symbols and other graphics available that you can download and use as the linking symbol. Some web sites perform some type of limited screening and approval process before granting permission. Otherwise, you can contact the website administrator directly via email and request linking to the website or a link exchange ideally.

This article was written by Philip A. Nicolosi, J.D. Mr. Nicolosi provides legal services through his law firm, Phil Nicolosi Law, P.C., focusing on startup and small business law, Internet & technology law and commercial transactions.

Mr. Nicolosi serves as a trusted advisor to numerous startups and small to medium sized businesses. This includes representation for a wide range of business law matters including business organization, corporate/LLC governance, regulatory law, contracts and transactions and most other matters outside of litigation. Mr. Nicolosi provides guidance with e-commerce, Internet marketing and technology-related legal matters. He also assists startup technology companies with seed financing, venture capital and exit transactions.

Mr. Nicolosi is also the founder of InternetLegalArmor (www.internetlegalarmor.com), an automated custom website legal document solution.

Visit Phil Nicolosi Law now, or contact Mr. Nicolosi directly by sending an email to info@philnicolosilaw.com

Article Source: http://EzineArticles.com/8604105

Website External Links and Framing Legal Guide!

legal guide

If you operate a website, are you aware of the ways in which website operators can become liable for use of external links? Traditionally, website operators have not been held liable for merely placing an external text link on their website. But, doing more than simply placing a text link on your site and your website content may in many instances result in liability. The following legal guide will introduce you to basic liability resulting from misuse of external links and for framing.

Types of Links & Framing

Before I discuss external links and framing liability, you should understand the basic types of website links if you don't already. There are two basic types of external links. Text links (embedded links in text) are called hypertext reference (“HyperREFerence”) links. These links can lead to a different point on the same page, or to a different page in the same site. Of course, hypertext links can link to third party webpages also. A graphic may serve as a hypertext link, but usually these links commonly appear as underlined, capitalized or otherwise prominent text.

The second type of link is an Image (“IMaGe”) link. An IMG link directs the web browser to retrieve an image from a separate image file. This type of link can reference a file from within a website, or from a third party web site. For example, using an IMG link, a web page could direct the visiting browser to retrieve a protected image, video or other content contained on another website and show it on the original website. This presents a seamless integration of web content even though they are not from different websites.

This process, linking and incorporating the content (text, video, audio file, etc.) of another website is also known as “in-line liking.” For instance, a video link embedded on your website is simply an in-line link. An in-line link displays, or “frames” the third party file on the original web page. When the user visits the original page, the HTML code on the original page direct the user's browser to the file located on the third party webpage.

“Framing” is a practice where one website uses frames to incorporate the content of another websites into a browser window along with the content from the original website. The website doing the framing may post navigation tools, text, trademarks and/or advertising along with the framed webpages. The more the framed website is integrated into the original website users may become confused over affiliation, endorsement or sponsorship. Unauthorized framing has been challenged under a variety of legal theories, including copyright and trademark infringement, unfair or deceptive trade practices, passing off, false light and false advertising among others.

Meta tags and keywords are considered “de facto” links as well. (Use of meta tags and keywords can lead to claims of trademark infringement).

Possible Liability For Using External Links

A. Copyright Infringement

Most external links are lawful. Generally, permission is not needed for a regular hypertext link to the home page of another website. There is substantial case authority that provides that traditional hyperlinking is not direct copyright infringement because there is no copying or display involved.

For example, in a key decision that has helped shape the law, the court in Ticketmaster Corp. v. Tickets.com, Inc. (2003) stated:

“… hyperlinking does not itself involve a violation of the Copyright Act (whatever it may do for other claims) since no copyright is involved. The customer is automatically transferred to the particular, genuine Web page of the original author. There is no deception in what is happening. This is analogous to using a library's card index to get reference to particular items, albeit faster and more efficiently.”

However, using external links on your website may create legal liability in some cases. External links can be unlawful when they i) cause consumer confusion; ii) encourage or facilitate illegal copyright infringement by others; or iii) violate other laws. In particular, copyright infringement (direct, contributory and vicarious infringement), trademark infringement and dilution, passing off and misappropriation are the main areas of liability. Defamation may also come into play.

1. Contributory Copyright Infringement

Contributory copyright infringement can occur by providing links to websites that display infringing material and actively encourage or facilitate the use of those links in various ways.

Instructions on following links and encouraging visitors to use them or including software that facilitates downloading infringing copies of content (such as peer-to-peer software) or including software that assists the downloading of material from remote sources, are all considered material contribution to copyright infringement.

In the cases that have decided this issue, the common elements have been that a middle party makes available a list of links to third parties who willingly make copyrighted works available for viewing or downloading. Websites don't directly host or re-transmit the protected content, but they do provide links to materials made available by others.

Contributory infringement occurs when an individual or business knowingly induces, causes, or materially contributes to the infringing conduct of others. The essential elements of this claim are knowledge of and participation in the infringement. In establishing a claim of contributory infringement, a copyright owner must establish the website had requisite knowledge and participation. The knowledge aspect can be established if the website has been put on notice, such as by receiving a cease and desist letter from the copyright holder, or even by allegations made in a pending lawsuit against the website. The participation aspect can be established by placing a link which facilitates the user going to another website containing the infringing items.

-EXAMPLE: Intellectual Reserve, Inc. v. Utah Lighthouse Ministry, Inc. (1999): A website (Intellectual Reserve) posted copies of a church's copyrighted handbook and provided links to other sites that contained infringing copies of the handbook. In this example, the defendant knew and encouraged the use of the links to obtain the unauthorized copies. This was held by the court to constitute contributory copyright infringement. The court issued a preliminary injunction directing the defendants to remove statements identifying the domain names of websites containing the handbook. This was held by the court to constitute contributory copyright infringement. The court reached this result despite the fact that the defendants' website did not contain any direct links to the infringing websites.

Intent and context matter.

Case law has shown that defendants have been found liable because they did more than just post links. The intentional encouragement of copying or downloading of protected materials is a liability trigger. Context can make it clear that a link is posted merely for its informational (indexing, referencing) content. Without active encouragement of use of illegal content, then “aggravating” factors are missing and courts have not imposed liability. In cases involving informational (“pure speech”) links, the elements of material furtherance of infringement (contributory infringement) and financial gain from infringement (vicarious liability) likely don't exist.

But, contributory infringement is subject to reasonable limits.

-EXAMPLE: Bernstein v. J.C. Penney, Inc.: A photographer sued the retailer J. C. Penny for a link on its site to a movie database. This link in turn linked to a site in Sweden that allegedly infringed the photographer's copyright in a couple of photographs.The court denied the plaintiff's motion for a preliminary injunction, and the plaintiff dismissed his case. Although a final resolution was not reached, this case suggests that claims of contributory infringement cannot be remote. There must be some reasonable limits in terms of third party linking to infringing materials.

2. Deep Links

Deep links direct the user to an image or webpage other than the homepage of a third party website. Many websites post introductory materials including third-party paid banner advertisements and special promotions or teasers relating to their own site on the home page. Businesses expect that most website visitors will find those advertisements before going further into the website's other pages. Deep linking and bypassing the home page of some other website has caused lost revenues. Of course, this has led to lawsuits. But, deep linking to interior pages of a website by itself is not copyright infringement when the copyrighted materials are not shown or displayed on the original website.

Deep linking by itself without confusion of source is not unfair competition. (Ticketmaster Corp. v. Tickets.com, Inc.). If deep linking is somehow done in a way that would confuse viewers as to affiliation, sponsorship or endorsement by the other website (i.e. trademark infringement), this could trigger a claim. For example, a deep link that says “Click Here For More Information,” which then leads viewers to a page on a competitor's website containing information about a similar product.

3. In-line Links & Framing

Can I embed links to videos and use “In-line” Image links?

Case law has held that In-line linking and framing by itself is not direct copyright infringement. The content is not a display or distribution in violation of copyright law.

In-line linking and framing may cause some users to believe they are viewing a single webpage (seamless content). But, the Copyright laws do not protect a copyright holder against acts that cause consumer confusion. Without causing consumer confusion, in-line linking and framing is within the law (although it's considered bad web etiquette).

In order to prove direct copyright infringement, a plaintiff must first prove that the defendant copied the protected work. A plaintiff must first establish: (1) ownership of the allegedly infringed material and (2) violation by the alleged infringer of at least one of the exclusive rights granted to copyright holders. Many of the claims for direct copyright infringement for “unauthorized” use of in-line linking and framing have gone nowhere. This is because there was no actual copying and display of the infringing content.

-EXAMPLE: Perfect 10, Inc. v. Amazon.com, Inc., et al.(2007): In what was the first court to provide an actual decision regarding the use of framing, the Ninth Circuit Appellate Court held that framing infringing images found on third party websites via in-line linking is not direct copyright infringement. Google presents a framed page in its search results where the bottom half comes directly from the third party web site where the image is actually found. The court used the “server” test and decided that a website that “frames” content by providing an in-line link to the copyright holder's site is not a public display or public distribution. The framed content is not being stored on the framer's server. The court also found that Google did not commit direct copyright infringement by providing “in-line links” to third party websites that contained infringing images. The Court stated that providing a link to a third party website that displays infringing images, by itself, does not make the original website liable for copyright infringement.

The Court also laid out a new test for secondary liability on the Internet. A computer system operator must have “actual knowledge that specific infringing material is available using its system” and “continue to provide access to infringing works.” This is true despite the fact the provider could take simple measures to prevent further damage to the copyright holder. The court struck down the vicarious liability infringement claim due to Google's use of in-line links because Google had no ability to control the third party websites or compel them to remove infringing images found on those sites.

Framing and Inline linking of third-party content into another web page can potentially raise the following issues: trademark infringement, passing off, defamation and possibly copyright infringement for creating a derivative work.

Framing and in-line links pose the same trademark and derivative work concerns. Framing might be viewed as more problematic when it comes to trademark infringement. A viewer could easily conclude that all the material on the framing website belongs to that site. But, you cannot in-line link or frame third party web-content and always escape liability. Even though you are not directly copying the content, your framed page along with the content from an external framed page could be viewed as an unauthorized modification of the content. In terms of potentially creating a derivative work, this really is a grey area and depends on the context and nature of the framing. So far, the issue hasn't been directly decided, but many intellectual property attorneys feel this practice could result in a derivative work.

-EXAMPLE: In Futuredontics Inc. v. Applied Anagramic Inc. (1997): Applied Anagramic (Defendant) operated a web site and divided its pages into frames. Defendant's website contained an unauthorized link to the Futuredontics website that caused copyrighted materials on plaintiff's site to appear within one of the frames of Defendant's website. The problem was that the rest of the page was filled with content supplied by Defendant, including its logo and information about its business operations. The court found that Futuredontics had failed to show that it was or would be injured by defendant's conduct. Absent the requisite showing of injury, plaintiff was not entitled to injunctive relief. However, the court left the door open for the creation of a derivative work. The district court would not dismiss the claim holding that the defendants conduct may create an unauthorized derivative work.

B. Trademark Infringement & Dilution

Any link (in-lining or framing) that falsely leads the viewer to conclude that the web page (owner) is affiliated, endorsed or sponsored by the trademark owner could lead to a claim of trademark infringement.

Trademark infringement basically occurs when someone uses a mark of another in such a way that creates a likelihood of confusion. Using an image link or framing that places another party's trademark or logo on your web page may cause confusion.For example, the use of a company logo to link to the company's website could be trademark infringement. If the consumer is likely to believe that the third party business or website is associated with your website, it is infringement. As a general rule, a link that simply uses a text reference rather than a logo or trademark does not make any implication about affiliation.

The use of logos and trademarks as direct links presents an obvious problem. Using a trademark or logo can expose you to liability if a court finds that the reasonable consumer would likely be confused, given the facts. In addition, The Federal Trademark Dilution Revision Act (FTDRA) of 2006 provides owners of famous marks with protection against dilution by blurring and dilution due to tarnishment. Under the revised FTDA, the plaintiff only needs to show the defendant's mark is likely to cause dilution. Improperly framing content of another website may result in consumer confusion (direct infringement) and/or claims of dilution.

-EXAMPLE: Washington Post Co. et al vs. Total News, Inc. (1997): The website Total News was sued by the Washington Post and CNN. The plaintiffs claimed trademark dilution for the framing of the news pages of plaintiffs' sites in a frameset that contained TotalNews advertising. Plaintiffs believed viewers of Total News would be confused since the viewer would see the plaintiff's news pages within a Total News frame, but without plaintiff's banner advertisements. This case was settled without a decision, but Total News agreed to stop framing and to use text-only links.

-EXAMPLE: Hard Rock Cafe, Int'l, Inc. v. Morton (1999): Defendant installed a link on their website which contained the words “record store.” Clicking on this link took the user to the “Tunes” web page which appeared in frames on the defendant's website. Frames appeared above and to the left of the webpage content containing the Hard Rock Hotel logo. The court found that a likelihood of confusion arose from framing the website because the distinction between the two sources of material appearing on the screen was not clear. “Through framing, the Hard Rock Hotel Mark and the [infringing site] were combined together into a single visual presentation.” However, the court did state that framing is a flexible device that in some instances might provide a clear distinction between different sources of the content.

A direct link contained on an offensive or disparaging website (i.e. a pornographic site) could potentially trigger a claim for trademark tarnishment?

Rule: If no “reasonably prudent Internet user” would associate a trademark with the linked site, then this claim would likely fail.

-EXAMPLE: Ford Motor Company v. 2600 Enterprises (2001): Defendant's website contained a text link to Ford's homepage from the website fuckgeneralmotors.com. Ford sued for trademark dilution, trademark infringement, and unfair competition. The district court stated that linking by using a trademarked domain name in a programming code is not a violation of the Ford trademark nor is it dilution of the mark.

-EXAMPLE: Voice-Tel Enters., Inc. v. Joba Inc. (2003): A claim for tarnishment cannot arise from the use of a trade mark on a website containing a link to a potentially offensive site.

C. Passing Off

Using external links improperly may be “passing off” if a website uses links to suggest that its products are those of a more highly regarded competitor.

There are additional common law claims under state unfair competition laws, namely passing off, contributory passing off, reverse passing off, and misappropriation. Passing off occurs when someone or some business tries to pass off its product or services as a third party product or services (or as having some association or connection with a third party when this is untrue). So, for example, framing webpages of a competitor's website in a way that suggests your products are affiliated or made by the competitor.

1. Contributory passing off occurs when the defendant assists or induces another (typically a retailer) to pass of its product as the plaintiff's product.

2. Reverse passing off occurs when someone tries to pass off someone else's product as their own. If you pass off images or logos via in-line links or by framing within your website in a way that suggests affiliation, this could amount to reverse passing-off. This is basically where the work of someone else is passed off as your own. For instance, you could tell your viewers to click here to see some product examples of what you sell, but which are taken from a competitor's webpage, and then claim they are your products. This type of reverse passing off by using a link to pass-off another's work violates state unfair competition and/or unfair business practices laws.

D. Misappropriation

is unauthorized use of another party's property of funds for personal gain. This is yet another potential concern if your using an external link(s) in a manner that allows you to gain something of value.

E. Negligence

Linking to a source which turns out to contain misleading or which contains harmful information may cause liability for negligence. Even simple informational links posted with no particular commercial purpose could create risks under the theory of “negligent publication.” Carefully drafted disclaimers in an External Links Policy, as discussed below, can help advise your website viewers that you are not responsible for third party website content.

F. Defamation

A link to another's webpage or image could be defamatory. For example, “This mortgage broker ripped me off and lied to me.” The statement itself does not identify the party. The link (assuming it actually linked to someone's website or webpage) provides the context that turns the statement into defamation, however.

TIP #1: Use External Links Policy/Disclaimers!

Using a properly drafter External Links Policy, which is really just a set of disclaimers, can serve as a defense to liability for external links. The disclaimers can help protect your business against a claim that could be made by any users of your site. Posting disclaimers is not an absolute shield from liability. But, it does put users on notice that the business does not control or have any affiliation with the content of third party websites. It can also set forth a policy for placing links on your website. Properly drafted external links disclaimers can prevent claims by your website users.

Some websites post no specific disclaimers, but instead display a notice stating something like “by clicking on this link, you will be leaving this web site and will be directed to a third party site, which we have no control over the content.” This operates as a disclaimer. You could also choose to use a link prominently located on your website leading to a separate page with the policy. Using a link labeled External Links Policy” is customarily how this should be handled. But, any link should be prominently located on your website and not hidden.

The best practice is to stick any external links disclaimers on a separate disclaimers page and in the website terms of use. You can then make your website visitors register and click to agree to the website terms before accessing any meaningful portion of your website.

TIP #2: Post a Hyperlink Policy On Your Site!

Your website should contain internal policies concerning who may link to your website and the manner in which it must be done (i.e. a “Hyperlink Policy”). You should also use a link exchange or hyperlink agreement whenever another website wants to do a link exchange with your site. This type of agreement should be used regardless of whether your business is being compensated for placing the link. The most important item to address in such an agreement is indemnification. I talk more about Indemnification later, but it basically is a way to get compensated by the owner of another website for liability your business incurs.

If there is infringing material on the site, the linked-owner is required to indemnify (reimburse all financial damages and costs incurred due to the link on your site) and defend your business against any claims. Indemnification should cover any claims of libel, violation of right of privacy, plagiarism, copyright or trademark infringement and any other claims or suits based on the content contained on the third party website.

Any website requesting a link should also provide a warranty and representation that the website operator(s) has the right to display all materials contained on the website. None of the content on the third party site should infringe on the rights of others including but not limited to rights in trademarks, copyrights, and patents. Further, the operators should warrant and represent that the third party website does not contain any obscene, vulgar, defamatory or any other illegal material.

Summary: External Links & Framing Guidelines

    • Avoid using links that suggest affiliation or sponsorship with some third party. Any link that falsely leads the viewer to conclude that the web page author is affiliated, approved, or sponsored by another website could lead to a claim of trademark infringement. This means avoid using links which are trademarks or logos. As a general rule, a text link that simply references a third party name (or product) rather than a logo does not suggest affiliation, endorsement or sponsorship;
    • Avoid using deep links that cause confusion as to source or affiliation with a third party website;
    • Avoid framing when doing so will cause consumer confusion. Including protected content or a third party trademark in the frame may cause confusion. If the frames are used to either make your website content look like it belongs to the linked site, or to make the linked site content look like it belongs to you, this could trigger a claim. You should clearly indicate third party ownership of any content you display from a framed third party website;
    • Framing content from other webpages in such a way that omits their banner advertisements and other ads;
    • Avoid using links (in-lining or framing) that pass off the goods or services of another company or website as your own;
    • Avoid using links that pass off your goods or services off as that of one of your competitor's;
    • Avoid websites that are “linking” sites. These websites provide access or unauthorized links to other websites where pirated sporting and pay-per-view events are hosted, where movies (or trailers) can be downloaded, or that contain illegal content such as pornography;
    • Avoid Defamatory links (i.e. “This guy ripped me off” where the link leads to a website operated by or involving the person referred to as “guy”);
    • Check the websites your links lead to regularly. Website owners change and website content may change over time;
    • Use an External Links Policy on your website and use a Hyperlink Agreement for link requests;
  • Obtain Permission to link to another website.The simplest and most direct way to prevent claims for infringement is to obtain permission. Some websites solicit or encourage links, and even make symbols and other graphics available that you can download and use as the linking symbol. Some web sites perform some type of limited screening and approval process before granting permission. Otherwise, you can contact the website administrator directly via email and request linking to the website or a link exchange ideally.

This article was written by Philip A. Nicolosi, J.D. Mr. Nicolosi provides legal services through his law firm, Phil Nicolosi Law, P.C., focusing on startup and small business law, Internet & technology law and commercial transactions.

Mr. Nicolosi serves as a trusted advisor to numerous startups and small to medium sized businesses. This includes representation for a wide range of business law matters including business organization, corporate/LLC governance, regulatory law, contracts and transactions and most other matters outside of litigation. Mr. Nicolosi provides guidance with e-commerce, Internet marketing and technology-related legal matters. He also assists startup technology companies with seed financing, venture capital and exit transactions.

Mr. Nicolosi is also the founder of InternetLegalArmor (www.internetlegalarmor.com), an automated custom website legal document solution.

Visit Phil Nicolosi Law now, or contact Mr. Nicolosi directly by sending an email to info@philnicolosilaw.com

Article Source: http://EzineArticles.com/8604105

Do You Own – and Control Your Domain Name? You May Be Surprised!

domain name

All too often, website owners are lax in nailing down ownership and control of valuable domain names, and as a result, are often required to litigate these issues costing them thousands. The case of Dawson v. Brandsberg illustrates these costly mistakes and how to avoid them.

Dawson v. Brandsberg – The Facts

The dispute was between a website operator and developer regarding rights to a domain name that consists of the operator's name: “robertedawson.com”. Plaintiff Dawson and his real estate firm (the website operator) hired Defendant Brandsberg (the website developer) to develop a website. A key fact is that there was no written agreement regarding possession or use of the domain name.

Other important facts include:

* Plaintiffs requested Defendant to register the domain name at issue;

* Defendant developed the website associated with the domain name; and

* Plaintiffs paid for the initial registration of the domain name, plus development, hosting, and maintenance fees for the website.

Eventually, the business relationship soured, and the Plaintiffs sought to transfer the domain name and the website to another internet service provider. The Defendant refused to transfer the domain name and the website, and essentially held the domain name hostage.

Dawson v. Brandsberg – The Decision

Dawson brought suit against Brandsberg in the U.S. District Court in Virginia under the Cyberpiracy Provisions of the Lanham Act,Section 43 (d), 15 U.S.C. 1125(d). Dawson v. Brandsberg, 2006 WL 2915234 (W.D. Va. Oct. 10, 2006). Plaintiffs argued that the federal cyberpiracy prevention statute was applicable, and that it protected the domain name and imposed liability for a bad faith registration with the intent to profit from the registration. Plaintiffs also argued that it had a non-exclusive, implied license to use the domain name, given that Plaintiffs had paid for registration, development, hosting, and maintenance of the website.

Defendant Blandsberg argued that:

* Plaintiff's name was not a proper trademark because it was not distinctive at the time of registration of the domain name,

* Defendant had registered the domain name and developed the website with the intent to sell it to Plaintiff at a later date, and

* Plaintiff had no copyright or implied license in the website.

Defendant Blandsberg filed for a motion to dismiss most of the counts of the suit. The Court ruled in favor of Plaintiff Dawson denying the motion. The Court seemed to rely heavily on Plaintiffs' arguments regarding the implied license, stating “Even assuming that Brandsberg created the website, if Plaintiffs have no license to use the website or domain name, the creation would be valueless”.

Conclusion: Lessons Learned

Don't rely on oral agreements; get it in writing! Provide not only for ownership of the website, but also of the domain name.

Provide that your domain name be registered in your name, not in the name of the vendor.

Also, note that control over the domain name is very important, and control goes with knowledge of the ID and passwords to the domain name account with the Registrar. So to maintain control, be sure to change the password so that you are the only one who has access to the administrative controls for your domain name at your Registrar's site.

Chip Cooper is a leading intellectual property, software, and Internet attorney who advises software and ecommerce businesses nationwide. Chip's easy and affordable online contract drafting service coordinates website contracts such as Terms of Use, Privacy Policy, Subscription, Membership, and SaaS agreements. Visit Chip's http://digicontracts.com site and download his FREE report, “12 Sure-Fire Ways Your Website Can Get You Sued”.

Article Source: http://EzineArticles.com/1183778

Do Trademarks Always Trump Domain Names? Not Always

trademarks

Online start-ups are faced with the daunting task of selecting a domain name that will withstand legal challenges.

There's a general belief among online start-ups that a trademark owner will always trump a domain name registrant with the same or confusingly similar domain name. That's not always the result… as two recent 2010 UDRP decisions point out.

The UDRP

What is the UDRP, and why is it important?

The UDRP acronym stands for the Uniform Domain Name Dispute Resolution Policy. The UDRP is a set of procedures and rules that are supposed to help determine who should prevail in a dispute over domain name ownership.

The UDRP is important because it provides a faster and cheaper way to resolve a domain name dispute than a full-blown lawsuit in a court of law. Instead of litigation, it's an administrative proceeding where the contestants present written arguments to a panelist-arbitrator who issues a binding decision. In-person hearings (including hearings by teleconference, videoconference, and web conference) are permitted only in exceptional cases, and are therefore rare.

The UDRP has not been without its critics. Most of the criticism centers on the fact that the UDRP was established to benefit trademark owners in taking non-trademark owners to task in domain name disputes. And UDRP critics often point out the fact the UDRP decisions seem to come out overwhelmingly in favor of trademark owners.

There are three requirements for a trademark owner-complainant to prevail over a domain name-respondent in a UDRP proceeding:

1 – the domain name registered by the respondent is identical or confusingly similar to a trademark or service mark in which the complainant has rights;

2 – the respondent has no rights or legitimate interests in respect of the domain name; and

3 – the domain name has been registered and is being used in bad faith by the respondent.

The Arizona State Trailer Sales Case

This case involved requirement no. 1 above.

The complainant, Arizona State Trailer Sales, argued that the respondent's littledealerrv.com domain name was confusingly similar to the complainant's registered mark, LITTLE DEALER LITTLE PRICES and the complainant's common law marks, LITTLE DEALER LITTLE PRICES RV and LITTLE DEALER.

The respondent argued that it should prevail because its registration of its littledealerrv.com domain name occurred prior to the complainant's registration of its trademark.

The respondent won. The UDRP panelist noted that a complainant has to show that the respondent's domain name is identical or confusingly similar to complainant's mark. “This provision necessarily implies that Complainant's rights must predate the registration of Registrant's domain name”, the panelist concluded.

The take-away – the respondent won because it registered its domain name before the complainant registered its trademark.

The University of Texas Case

The University of Texas at Austin (UT) case involved requirement no. 3 above.

UT showed that it owned the texassports.com domain name, as well as the following registered trademarks: TEXAS, UNIVERSITY OF TEXAS, TEXAS LONGHORNS, and LONGHORNS. UT also showed that its TEXAS mark is registered for “Entertainment services, namely, providing college athletic and sporting events.”

UT argued among other things that the use of respondent's texassports.org domain was in bad faith because it was used as a “parking” website for information related to University of Texas sports and sporting events.

The respondent won. The panel found that UT did not prove “bad faith”. The panel reasoned that because the term “Texas Sports” is geographically descriptive, the respondent was free to register its domain name using the term on a “first-come, first-served basis”.

The panel also found that UT did not have a registration for the term “Texas Sports”, and therefore there was no likelihood of consumer confusion.

Conclusion

Selecting a domain name that will withstand legal challenges is a strategic undertaking for any online start-up.

The important lesson is that although the UDRP may help in deciding in favor of a respondent in a domain name dispute with a trademark owner, the recommended approach is to avoid the dispute altogether by undertaking a thorough search of pre-existing trademarks before selecting a domain name.

Copyright 2010 Chip Cooper

Leading Internet, IP and software lawyer Chip Cooper has automated the process of drafting Website Legal Forms for website legal compliance. Use his free online tool — Website Documents Determinator — to determine which documents your website really needs for website legal compliance. Discover how quick, easy, and cost-effective it is to draft your website legal forms at DigiContracts.com.

Article Source: http://EzineArticles.com/4855748

How to Write Website Terms of Service (AKA Terms of Use or Terms and Conditions)

terms of service

Terms: The Background

Why do we care about a web site's Terms and Conditions? Everyone knows that a site needs to have legal Terms. Few people think about the obvious question: Why?

While our statutes, regulations and past cases are full of laws and their applications when it comes to everyday interactions, few laws and cases exists with respect to online interactions. Why? Our cyber universe, as a mature legal arena, has existed for only some ten or fifteen years. When compared to the hundreds of years of “real world” interactions, its easy to see why many legal “holes” exists in our system.

Under US law, these legal “holes” are filled up with with either judge-made interpretations or privately drafted contract law. Given that on any single day, a judge reviewing an online case may have come from family, criminal or juvenile courts, we would rather leave as little for judges to decide on their on as possible. We achieve this through proper negotiation, drafting and implementation of site Terms.

Luckily for us, the US, as opposed to many civil code jurisdictions, respects privately negotiated contracts. Web site Terms are nothing more than privately negotiated contracts. Unless you realize this important point, you will end up leaving too much for judges to decide.

Three Common Mistakes

Failing to realize that web Terms are privately negotiated agreements, most web site operators make three common mistakes.

They Copy Other Sites' Terms: The most common way for site administrators to “draft” site Terms is by copying it from other sites. Worse, they copy it from some site touting its Terms as a standard that once edited can be used by anyone. Why? because, few administrators understand how important these Terms are. Fewer still understand the impact Terms have on each and every future online dispute.

They fail to Negotiate the Terms: The most common mistakes made by site administrators is believing that if they post Terms on the internet, they will bind visitors. That is equivalent to posting mortgage papers on the wall of a bank and believing that everyone who enters will be bound by those documents. Web site Terms must be negotiated to be valid. This is a critical component of online compliance; few, however, understand how online negotiations take place.

They Don't Change with the Times: Internet laws “develop” or “mature” through case law on a daily basis. Since so few cyber laws are codified through statutes, compliance can only be reached through Terms amendments reflecting these latest rulings. Many site Terms, however, were drafted 6 months to 3 years ago. Administrators must start thinking about making key changes to Terms on a regular basis.

The Risk of Non-Compliant Terms

In our representation of online companies, we see four main areas of risks faced by clients. These risks are easily avoidable; however, due to a lack of understanding risks often mature into costly if not destructive forces for a young company.

Many online companies unknowingly make promises to online users that they never intend. I've seen clients with subscription based pricing models having copied Terms relevant only to one time charge sites. As a result, they were liable for wrongful charges. Some clients with upstart e-tail sites, ended up making consumer support promises which only the like of Amazon or Buy.com could make.

Important contract provisions get struck down. When online companies fail to understand that Terms must be “negotiated” with users, they end up surprised when judges strike down provisions that are employed by countless other sites. The typical response is, “How could a judge do this? It is Standard industry practice.”

The Company assumes unnecessary levels of liability. When Terms are not properly drafted and negotiated, incorrect provisions can result in substantial corporate liability. There are countless class-action websites run by attorneys soliciting clients for class action law suits against online companies. Having the wrong Terms can be devastating.

Administrators facing personal liability. Hard to believe, but when Terms are drafted improperly the owners and operators of sites can face liability personally, not just as a corporation.

Step 1: Define Your Goals

It may sound strange, but before you can start drafting any Terms you need to figure out what your goals are. The Terms must reflect your goals. More importantly, they need to avoid saddling you with unnecessary obligations.

If you are building an affiliate marketing campaign and deploying squeeze pages, what are your goals? You want to build a mailing list, that's obvious. But what are the Terms of the transaction? You may want to give them a free gift or service in exchange for information. Alternatively, you may want them to read product descriptions. Either way, what do you want you customers to do?

If you are building a forum or soliciting product reviews, what do you want users to do? You want them to post comments but you want them to behave in accordance with the law. What does that mean? How can their behavior make you liable to third parties?

If you are building an e-tail site, what do you want to accomplish? You obviously want to make sales, but you also don't want to be liable for faulty products, lost shipments or false advertising.

What if you are designing software that runs on the internet? You want to make sure it is deployed in accordance with legal allowances. You also want to make sure that its not distributed without your consent. What about a dating site? Here you want to make sure that members are truthful and that people interact safely.

Every online product or service is unique. Start by defining your goals. There can never be too many. The mistake is to just ignore this stage.

Step 2: Where is Your Liability?

Once you figure out what your goals are, you need to think about where potential liability can come from.

If you're developing an affiliate marketing campaign, you face liability from potential false advertising and product liability.

If you you built a widget that runs off of tweeter, you face potential trademark and copyright violations in redisplaying tweets.

If you run a forum, you face publisher liability for comments made by users.

If you developed software that automates posting to Craigslist, you face liability for enabling your users' unintentional violation of that site's terms of service.

If you develop a squeeze page you may face privacy concerns due to follow up advertising.

If you develop a digital entertainment download site, you may face liability due to copyright infringement for ringtones and games.

If you build a social network site, you face liability for intellectual property infringements for users' posting.

There is unlimited forms of liability faced by online companies. The trick is to give some thought to all potential issues that can arise in the future, however remote. Always ask, what can someone end up being unhappy about? Even a $2.99 download product can result in millions of dollars in liability.

Step 3: Define Your Customer's View

It's one thing to figure out what you want. It's quite another thing to figure out what your customer wants to achieve. Don't forget what we said earlier on: A web site's Terms is a negotiated agreement. It can never be one sided or it risks being thrown out by a judge. So what do your customer want?

A customer who clicked on an advertisement to an affiliate marketing site, wants truth in advertising regarding the product.

A visitor to a squeeze page wants an exchange of his information for value. The e-product must be delivered as promised.

A subscriber to a newsletter wants his information kept confidential from 3rd party marketers.

A member to a dating site wants his personal information kept confidential from other members unless he wishes them revealed.

A customer of a digital entertainment site wants his digital game to operate properly.

A customer downloading a ringtone wants to make sure that he is paying for one download and not paying for a subscription.

A buyer from an e-tail site wants to know who to return the product to in the event of a complaint.

A client posting a review wants to make sure you keep his identity confidential.

If you haven't given thought to what your customers want, a judge will. The negotiation starts by you thinking about your customers needs.

Step 4: Enable through Negotiation

So how do we put everything together? How do we enable our goals, while minimizing potential liability and allowing for customer wishes? We negotiate with the customer. I know this sounds strange. How can you ever negotiate with a visitor to a splash page?

Terms of service are worth little if a court is likely to later dismiss many of the key provisions. Courts over the past few years have struck down many important sections of leading sites' Terms as being too one sided. How do you avoid it?

Focus on the best form of “consent”. Most web sites at best offer a link at the bottom of a page to the site's Terms. Others go a little further by requiring the users to check a box as having “agreed” to the site's Terms. However, if you have a provision that you “must” make sure that a court will uphold you can do better. There are countless options available to make sure that a client reads and consents to important terms (e.g. displaying summarized terms of service).

For some key issues, like dispute resolution, afford the user options. Most attorneys, inexperienced in online law, draft straight forward terms. As they try to bind users, they fail to understand that unless they build options into the Terms (like how to best resolve disputes) judges are likely to strike the provisions down.

Don't fail this step. Negotiate fair Terms with your customers by giving them ample chance to consent to important provisions and providing them with options on how to best implement the Terms.

Step 5: How to Make Changes?

You can be assured of one thing. You'll have to make ongoing changes to your Terms. Not only are your business practices likely to change over time, online laws change on a regular basis. As online legal cases make it through the court system, we must incorporate into existing Terms any new legal interpretations and findings. Failing to do so, assures us of stale and irrelevant Terms. Basically, absent amendments to our Terms, the goals we set up earlier while minimizing liability will be ineffective.

But how do we make changes? If we look at the typical terms of service agreement, we are likely to see a statement such as this: “XYZ reserves the right to amend these terms of service at any time, with or without notice to the users. It is the user's obligation to check this page from time to time to see if any changes to the terms were made.”

Does this provision seem strange? How often have you heard of a contract that can be amended unilaterally by one side without notice or the option to back out? Not often! That's because, in our normal daily lives we would never agree to such a contract. So why should such a contract apply online?

Courts have, in online cases, consistently rejected contract provisions which were deemed too onerous when one side did not have the opportunity to choose among alternatives, negotiate or withdraw. From cases concerning arbitration clauses to subscription pricing, courts have rejected provisions that are too one sided.

While this provision is widely accepted in the industry, I would not advise building an online business based on the broad application of unproven and legally weak provisions. Avoid the risk of a court rejecting your Terms. The solution: NOTICE. Go out of your way to provide your users with notifications of any changes made to your policies. Send out email and txt messages. Post notices of revisions to your site. Have members “re-accept” the new Terms.

You can never do too much when it comes to providing notice of changes.

Step 6: How to Control Liability

So by now, we negotiated compliant Terms for our online business. Is that enough to control our liability. No! To assure that any potential future liability is contained, you must follow these three steps:

Follow the Terms: This may seem so simple, but so few actually follow it. You need to know your Terms and you need to follow the Terms. If you made promises, keep them. If you provided customers with procedures they need to follow, respect them. Don't create a situation where you actually create liability for yourself by having drafted compliant Terms but having failed to follow them. Remember, since there are many “holes” in the online legal system, judges rely on privately negotiated contracts such as Terms. Your failure to follow your own Terms will be read against you. You would have effectively breached your agreement with your clients.

Teach your Clients: So you “negotiated” your Terms through proper usage of the “acceptance” procedure. But do your clients know what to do? Often you liability is tied to your clients' behavior. So go out of your way to teach them proper and lawful behavior. From support forums to seminars, from conference calls to newsletters – Build a culture of education by teaching your clients the lessons that are important to you.

AND… Build Liability Proof Domestic and Offshore Corporate Structures.

Build Liability Proof Corporate Structure

After all is said and done, don't forget that your best ally when it comes to managing potential liability is the corporate structure that you've set up.

Basic corporate structures, if properly set up and managed over the years, will provide you with some liability protection. That might be enough for some simple online businesses such as squeeze page powered affiliate marketing campaigns and e-tailers.

For other online businesses, a more sophisticated form of domestic and offshore corporate structure is needed. Believe it or not, your greatest risk will not come from government. It will come from competitors. Everyday, large tech companies compete with smaller more nimble companies using the court system. And why not? In court, the larger companies have an advantage – money.

Many entrepreneurial companies have gone out of businesses after being dragged into court by larger companies. For many online and software companies, compliant Terms will not suffice. They need to supplement those Terms with a structure that evens out the odds in court.

This is a topic too large for this eGuide. Speak with an attorney about the design of domestic and offshore networks of online compliant corporate businesses.

Where Do We Go Next?

Sit back and start designing your site's Terms. The more questions you have, the better it will end up. And remember what we said in the beginning of this eGuide: A Site's Terms is only one component of its overall online compliance.

Make sure your Terms integrate and support your business' overall online compliance strategy including:

Online Privacy Software Compliance Mobile Compliance Direct Marketing (email and txt) Intellectual Property Compliance (trademark and copyright) Online Advertising Online Promotions (contests and sweepstakes).

Once you design an overall compliance strategy, examine your business' liability exposure and the ability to incorporate an online liability management system based on both domestic and offshore corporate structures.

By: Lior Leser, Esq. – Web 2.0 Lawyer
www.web20lawyer.com

Lior Leser counsels Internet, mobile and software companies as a head of the LYL Law Group. Mr. Leser earned his J.D. at Stanford Law School (Stanford, CA). He also attended Sophia University (Japan) and the London School of Economics (London, UK) for advanced studies in Finance. He attended Brandeis University (Waltham, MA), where he earned an M.A in International Economics and Finance and a B.A. in Economics.

Article Source: http://EzineArticles.com/6808429

Trademark Registration: Protecting Your Logo Design

Question: Is a federal trademark registration the right way to protect a logo design?

Answer: It depends…

The answer to this question depends on how you intend to use the mark in commerce. For example, let's say you develop a logo or design that you and your friends really like and people are asking for a t-shirt that displays the logo. So you now plan on going into business selling t-shirts, sweat shirts, etc., with your logo prominently displayed. But before you do, you want to make sure and protect your logo design. Is trademark the best protection?

Remember, a trademark is an identifier. The mark identifies to the consuming public the producer of a particular product, or in the case of a service mark, the source of a particular service. With use in commerce, it becomes a recognizable logo design which identifies your product or services from those products or services of others. That's not what the logo design is doing in our t-shirt example. You are not a t-shirt, sweat shirt manufacturer. You are simply purchasing the clothing from another source in order to display your new design. The logo is simply being displayed on the t-shirt, it is artwork. According to trademark law, subject matter that is merely a decorative feature does not identify and distinguish the business owner's goods and, thus, does not function as a trademark. You are not using the logo design as a trademark, but as an identifier. I would therefore not advise pursuing trademark protection but instead, apply for copyright registration on the design.

If however, you have a product, and you intend to display the very same new logo on the product, and/or display the new logo design on the product's packaging as well as the advertising materials for the product, that's clearly using the logo as a trademark. With continued use in commerce, you are teaching the public that when they see the logo design on a product, or on packaging, or in advertising, that your business is the source of the product. In this case, trademark registration is the right way to protect the design.

Is your name, logo, design actually a trademark, or more ornamentation? The exact same design logo, however, in one example, copyright registration is the answer, and in the second example, trademark registration is the answer. It all depends on how you use the mark in commerce.

About the author:

Gary Price is an attorney registered to practice before the United States Patent and Trademark Office. His legal practice includes all areas of Intellectual Property. Mr. Price also provides federal registration services under the business name Trademark Connect. If your business wants to register its brand, then go to http://www.TrademarkConnect360.com and learn more about our registration services and our registration Guarantee.

Article Source

Can you register a trademark for a domain name?

The answer is YES! Read this article by the Small Business Development Center to learn more.

To search for and register your domain name, go to http://www.myinternetwebsite.com/

Web Design Questionnaire

In order to provide you with the best service, we should fully understand your website needs.  Here's a questionnaire you should review and discuss with us.

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