Marc is a patent attorney and shareholder of the intellectual-property law firm of Poms, Smith, Lande, & Rose in Los Angeles, CA. Marc specializes in computer law and can be contacted at 73414.1226@compuserve.com.
With domain names up for grabs, some interesting choices have been made. A writer for Wired magazine fancied "ronald@mcdonalds.com." A businessman decided to better his business with "bbb.com." A former MTV veejay latched on to "mtv.com." A Sprint employee sped away with "mci.net."
The companies whose names were associated with these enterprising escapades weren't amused. Each turned to what is now more common in America than apple pie--a lawsuit. The fun-filled cybermice weren't the only ones snared in this nasty net. Network Solutions, the organization blessed with dishing out Internet domain names, was sometimes named, too, along with site providers to whom all bytes seem the same.
Almost every month you read about one of these trademark-related cybertangles. But can big companies with legions of lawyers really put a stop to it? So far, no court has decided.
Before there can be trademark infringement, there must be trademark use. Consider the software whose packaging states "for use with all IBM-compatible computers." Intuitively, this does not seem like an act of trademark infringement. But why not? The software vendor was using IBM's name without its permission, in a manner which the public would immediately recognize as a reference to Big Blue.
The answer lies in an understanding of what a trademark is and what it is not. A word, by itself, is not a trademark. A word (or phrase) is a trademark only when it functions to distinguish the source or sponsorship of one company's goods or services from another's. (Technically, "trademark" is used in reference to goods, while "service mark" is used in reference to services. For simplicity, I am using "trademark" as a reference to both.)
This definition helps explain the intuitive answer to the IBM example. The name IBM was not used in a manner which suggested that the software was manufactured or sponsored by IBM. Thus, IBM was not being used as a trademark for this software. Its use in this example, therefore, could not be a trademark infringement.
Now take a look at Internet domain names. Do they really indicate sponsorship or source of origin? How does the net surfer learn about a particular name? Does he just think to himself that he would like to see whether Michael Jackson's newest video will be on MTV and then takes a shot at mtv.com? It's possible, but not likely. Far more likely is that the domain name came from a promotional piece or a company-name search. In these cases, the user knows who is associated with the domain name and who is not. Whatever uncertainty may have existed is also usually dispelled upon connection to the site. It is usually then readily apparent that the site is not sponsored by the complaining company.
Here lies one of the fundamental problems with the allegation that an unauthorized domain name constitutes trademark infringement. Net surfers simply are not likely to associate the domain name with the complaining company.
One issue you may soon be hearing more about is whether the "look and feel" of software can be protected as a trademark. There has not been a great deal of litigation on this issue. But that may change in view of the recent decision in Lotus Development Corp. v. Borland International, where the court held that the entire menu tree to the famous 1-2-3 spreadsheet program was not protectable under copyright law. As the scope of protection under copyright law shrinks, more emphasis may be placed upon trademark theories.
Remember, also, that a design can function as a trademark. The checkered, wavy window used on Microsoft Windows is one such example. In some circumstances, color can also function as a trademark.
The relationship between a trademark and its goods or services can have a substantial impact upon the degree of protection provided.
Some marks, such as "Paradox" for Borland's database manager, have no relationship to the product. These "arbitrary" marks are given the greatest degree of protection.
A "suggestive" relationship to the software, however, is often important to achieving market penetration. Examples include "Access" for Microsoft's database manager and "WordPerfect" for Novell's word processor. These trademarks suggest a feature of the software. A suggestive trademark is still entitled to legal protection, but not as much as an arbitrary trademark.
When the trademark simply describes the software, the trademark may be found "merely descriptive." Examples include "Fast" for a communication program or "High Resolution" for a CAD program. Merely descriptive trademarks will not be protected until the purchasing public perceives them as indicating source, not simply a description of the product. This usually requires long and widespread use. This ensures that other companies can continue to describe features of a competing product.
One type of relationship that will never be protected is when the trademark is the generic name for the software. "Word Processor" for a word-processing program is a good example. No matter how long, prominent, or widespread the use, the law will never protect "Word Processor" as a trademark for this software.
After selecting a trademark, it is prudent to have a search conducted to determine its availability.
There are different levels of searches. For about $300.00, a search can be performed in databases containing all federal and state trademark registrations and many major telephone books and trade directories. One of the more experienced trademark-search companies is Thomson & Thomson (800-692-8833 or htpp://www.thomson.com/thomthom.html).
When the initial investment in promoting the trademark will be substantial, far more extensive searches can and should be made.
Why should you search in telephone books and trade directories? If the trademark has not been registered, is there anything you have to worry about?
Yes. Unlike an invention, a trademark will normally be protected after it is first used, even if it is not registered. Therefore searching only trademark registrations is not sufficient.
To obtain rights in a trademark, use of the trademark is therefore essential. For software, the trademark should be affixed to the package containing the software and to the label on the disk. It should also be displayed during use of the software. For a software-related service, the service mark should appear in promotional material for the service, as well as in all other material associated with the service.
The manner in which the trademark is used is also very important. A trademark should usually be used as an adjective, not a noun. For example, the carton for Microsoft Access reads "Access...Database Management System." The trademark should also be displayed more prominently than other words (or symbols) on the packaging.
To help teach the public that you regard the word or phrase as a trademark, the symbol TM should be placed near the trademark; for software services, an SM should be used, instead. If the trademark has been registered with the United States Patent and Trademark Office, the symbol (R) should be used.
If registration is not a requirement for trademark protection, should you bother to register? Yes. Registration provides many additional benefits, one of the most important of which is the right to expand the use of your trademark into new geographic areas. While you were busy developing a market in northern California, another company might start using the same trademark on the same type of software in New York. Once you became successful and began expanding into a national market, that New York company would have the legal right to stop you from using your trademark in New York! The result would be exactly the opposite if you first procured a federal registration.
Another important benefit of federal registration is that it solidifies rights in a trademark on the day the application for registration is filed, even if the trademark is not used until many months later. This is often of vital importance. The first to obtain rights in a trademark is the one entitled to enforce it against another. Without federal registration, rights can only be procured through actual use in the marketplace. Usually, months pass between the time a trademark is selected and the time it is actually used in the marketplace. If an application to federally register is promptly filed, the filing date of the application can be relied upon as the first-use date, instead. This several-month difference can be a determining factor in a legal dispute.
The second major problem in asserting a trademark-infringement claim against a domain name is that a trademark does not provide the right to prevent every other company from using the trademark. Instead, it merely provides the right to stop another company from using the trademark in a manner likely to cause confusion as to the origin or sponsorship of goods or services. Likelihood of confusion as to source or sponsorship is the test, not mere similarity in the trademarks.
The similarity between the trademarks, of course, is still important. The accused trademark is examined for similarities in appearance, pronunciation, and meaning (the so-called sight, sound, and meaning test).
But equally important are similarities in the goods or services. Mead Data Central was reminded of this fact a few years ago when it was unable to obtain an injunction against use of the name "Lexus" for automobiles, even though Mead Data had used "Lexis" for computer-assisted research services for over a decade. There was simply no likelihood that consumers would believe that the automobile was manufactured or sponsored by the information-service provider; that is, no "likelihood of confusion" would arise as to source or sponsorship.
The use of one company's name as part of another's domain name may similarly not result in any "likelihood of confusion." The pathways through which a domain name come to one's attention usually are not likely to suggest any association between the domain name and the company whose name appears in it, unless, of course, it is the domain name of that company's site. If the goods or services that are ultimately associated with that domain name after connection to the site are markedly different from those of the company whose name is a part of that domain name, any uncertainty which might have existed will also probably be extinguished quickly.
Thus, simply incorporating another company's name as part of a domain name does not necessarily create a likelihood of confusion with that other company. If the goods or services associated with that domain name are similar to the company's, however, such a likelihood may well exist.
Likelihood of confusion is also determined by similarity between marketing channels, the strength of the asserted mark (including such considerations as distinctiveness and fame), and whether the alleged infringer adopted his mark with the intention of causing confusion. Although not required, proof of actual confusion is considered highly probative of a likelihood of confusion.
Other legal theories may be used to support an attack against an unauthorized domain name. These theories are also often used in more-traditional business settings.
"Dilution" is a theory under which a court will enjoin an unauthorized use of a company's trademark. The unauthorized use of a trademark can often dilute its distinctiveness, even though the consumer is not likely to mistake the unauthorized use for the authorized one. Dilution is only recognized in 26 states, including California and New York. In these states, it may become the weapon of choice in the cyberspace trademark wars.
Even in these states, however, most courts have been unwilling to protect a mark against dilution unless it is very famous. In the past, these courts also required the unauthorized use to have been disparaging. Recent decisions, however, are moving away from this last requirement. Other legal theories that might be asserted include unfair competition and intentional interference with business relations. Many unauthorized domain names, however, are not being used in competition with the trademark owner. There are also broad privileges arising out of the rights to freedom of speech and to do business. These might also serve as defenses to such claims. However, it is unlikely that a court would find any privilege when another company's name is incorporated into a domain name simply to coerce the payment of money for its relinquishment or to be mischievous.
Here are some other useful pointers:
So you still want to know whether McDonald's, the Better Business Bureau, MTV, and MCI will be victorious? Here's my best guess (or what we lawyers call "the answer"): If the domain name was selected in hopes of coercing a payment for its relinquishment, to see the owner's name in print, or because the owner actually wanted to confuse people into believing that his goods or services were associated with the company whose name he was so fond of, he had better start packing his bytes and looking for a new pad. He may have some fanciful arguments, but I doubt the judge will be listening. Network Solutions has also recently issued a new set of regulations to pull the rug out from under him before he ever gets to the courthouse.
But what if the owner truly adopted the domain name in good faith and without the intent to cause any of this havoc? He might be okay if he did not associate the domain name with any goods or services similar to those of the other company.
Now for your final-exam question: Could another lawyer use the name of this column, "Software and the Law," as the name of his column in another magazine? And for extra credit (and please don't send your answers to DDJ): If "Software and the Law" is an enforceable service mark, who owns this enforceable right--its creator and author (me) or its publisher?
Copyright © 1995, Dr. Dobb's Journal