Trademarks – Attorney Evan Brown

April 10, 2024 Artificial Intelligence, Trademarks

Key Takeaways From the USPTO’s Guidance on AI Use

uspto ai

On April 10, 2024, the United States Patent and Trademark Office (“USPTO”) issued guidance to attorneys about using AI in matters before the USPTO. While there are no new rules implemented to address the use of AI, the guidance seeks to remind practitioners of the existing rules, inform of risks, and provide suggestions for mitigating those risks. The notice acknowledges that it is an effort to address AI considerations at the intersection of innovation, creativity and intellectual property, consistent with the President’s recent executive order that calls upon the federal government to enact and enforce protections against AI-related harms.

The guidance tends to address patent prosecution and examination more than trademark practice and prosecution, but there are still critically important ideas relevant to the practice of trademark law.

The USPTO takes a generally positive approach toward the use of AI, recognizing that tools using large language models can lower the barriers and costs for practicing before the USPTO and help practitioners serve clients better and more efficiently. But it recognizes potential downsides from misuse – some of which is not exclusive to intellectual property practice, e.g., using AI generated non-existent case citations in briefs filed before the USPTO and inadvertently disclosing confidential information via a prompt.

Key Reminders in the Guidance

The USPTO’s guidance reminds practitioners of some specific ways that they must adhere to USPTO rules and policies when using AI assistance in submissions – particularly because of the need for full, fair, and accurate disclosure and the protection of clients’ interests.

Candor and Good Faith: Practitioners involved in USPTO proceedings (including prosecution and matters such as oppositions and cancellation proceedings before the Trademark Trial and Appeal Board (TTAB)) are reminded of the duties of candor and good faith. This entails the disclosure of all material information known to be relevant to a matter. Though the guidance is patent-heavy in its examples (e.g., discussing communications with patent examiners), it is not limited to patent prosecution but applies to trademark prosecution as well. The guidance details the broader duty of candor and good faith, which prohibits fraudulent conduct and emphasizes the integrity of USPTO proceedings and the reliability of registration certificates issued.

Signature Requirements: The guidance outlines the signature requirement for correspondence with the USPTO, ensuring that documents drafted with AI assistance are reviewed and believed to be true by the signer.

Confidentiality: The confidentiality of client information is of key importance, with practitioners being required to prevent unauthorized disclosure, which could be exacerbated by the use of AI in drafting applications or conducting clearance searches.

International Practice: Foreign filing and compliance with export regulations are also highlighted, especially in the context of using AI for drafting applications or doing clearance searches. Again, while the posture in the guidance tends to be patent heavy, the guidance is relevant to trademark practitioners working with foreign associates and otherwise seeking protection of marks in other countries. Practitioners are reminded of their responsibilities to prevent improper data export.

USPTO Electronic Systems: The guidance further addresses the use of USPTO electronic systems, emphasizing that access is governed by terms and conditions to prevent unauthorized actions.

Staying Up-to-date: The guidance reiterates the duties owed to clients, including competent and diligent representation, stressing the need for practitioners to stay informed about the technologies they use in representing clients, including AI tools.

More Practical Guidance for Use of Tools

The guidance next moves to a discussion of particular use of AI tools in light of the nature of the practice and the rules of which readers have been reminded. Key takeaways in this second half of the guidance include the following:

Text creation:

Word processing tools have evolved to incorporate generative AI capabilities, enabling the automation of complex tasks such as responding to office actions. While the use of such AI-enhanced tools in preparing documents for submission to the USPTO is not prohibited or subject to mandatory disclosure, users are reminded to adhere to USPTO policies and their duties of candor and good faith towards the USPTO and their clients when employing these technologies.

Likely motivated by court cases that have gotten a lot of attention because lawyers used ChatGPT to generate fake case cites, the USPTO addressed the importance of human-review of AI generated content. All USPTO submissions, regardless of AI involvement in their drafting, must be signed by the presenting party, who attests to the truthfulness of the content and the adequacy of their inquiry into its accuracy. Human review is crucial to uphold the duty of candor and good faith, requiring the correction of any errors or omissions before submission. While there is no general duty to disclose AI’s use in drafting unless specifically asked, practitioners must ensure their submissions are legally sound and factually accurate and consult with their clients about the representation methods used.

More specifically, submissions to the TTAB and trademark applications that utilize AI tools require meticulous review to ensure accuracy and compliance with the applicable rules. This is vital for all documents, including evidence for trademark applications, responses to office actions, and legal briefs, to ensure they reflect genuine marketplace usage and are supported by factual evidence. Special attention must be given to avoid the inclusion of AI-generated specimens or evidence that misrepresents actual use or existence in commerce. Materials produced by AI that distort facts, include irrelevant content, or are unduly repetitive risk being deemed as submitted with improper intent, potentially leading to unnecessary delays or increased costs in the proceedings.

Filling out Forms:

AI tools can enhance the efficiency of filing documents with the USPTO by automating tasks such as form completion and document uploads. But users must ensure their use aligns with USPTO rules, particularly regarding signatures, which must be made by a person and not delegated to AI. Users are reminded that USPTO.gov accounts are limited to use by natural persons. AI systems cannot hold such accounts, emphasizing the importance of human oversight in submissions to ensure adherence to USPTO regulations and policies.

Automated Access to USPTO IT Systems:

The guidance notes that when utilizing AI tools to interact with USPTO IT systems, it is crucial to adhere to legal and regulatory requirements, ensuring authorized use only. Users must have proper authorization, such as being an applicant, registrant, or practitioner, to file documents or access information. AI systems cannot be considered “users” and thus are ineligible for USPTO.gov accounts. Individuals employing AI assistance must ensure the tool does not overstep access permissions, risking potential revocation of the applicable USPTO.gov account or face other legal risk for unauthorized access. Additionally, the USPTO advises against excessive data mining from USPTO databases with AI tools. The USPTO reminds readers that it provides bulk data products that could assist in these efforts.

April 8, 2024 Cybersquatting, Trademarks

Sprint puts an end to entrepreneurs’ efforts to revive NEXTEL brand

abandonment — This house is abandoned but the NEXTEL mark is not.

Plaintiff Sprint (owner of the NEXTEL brand) sued defendant business owners, asserting claims for trademark infringement, cybersquatting and counterfeiting. Beginning in 2016, defendants – apparently believing that Sprint had abandoned the NEXTEL mark – began selling cheap cell phones branded as Nextel devices, and operating websites lauding the brand’s “revival”.

The question of defendants’ liability for infringement of the NEXTEL word mark went to a jury, which found in favor of plaintiff. The jury rejected defendants’ argument that Sprint had abandoned the NEXTEL mark.

Defendants sought review of the jury’s finding of no abandonment with the Eleventh Circuit Court of Appeals. On appeal, the court affirmed the lower court’s judgment.

The court examined how abandonment is a defense in trademark infringement cases, requiring discontinuation of a mark’s use with no intent to resume. Trademarks must be used genuinely, and the Lanham Act provides that three years of nonuse is prima facie evidence of abandonment.

The court concluded that the evidence showed Sprint’s continuous use of the NEXTEL word mark. For the three year period that defendants claimed Sprint had not used the mark, Sprint had provided evidence that the mark was used on at least two products. This continuous use also undermined defendants’ arguments against the cybersquatting claim.

Sprint Communications, Inc. v. Calabrese, 2024 WL 1463416 (11th Cir., April 4, 2024)

January 16, 2024 Trademarks

Who owns the trademark rights in the name of a user-created community?

trademarks social platforms

In the realm of online communities, where does the ownership of trademark rights lie – with the platform hosting the community or the individual user who creates and develops it?

The intriguing case involving Reddit and the founder of the well-known r/WallStreetBets subreddit presents a scenario that addresses this question concerning online communities and intellectual property rights. The case deals with the ownership and alleged infringement of two trademarks: WALLSTREETBETS and WSB.

Reddit and WallStreetBets

Reddit is a widely-used social media platform that enables users to create, manage, and participate in communities known as subreddits, centered around various interests. Plaintiff Rogozinski launched r/WallStreetBets in January 2012 to establish a forum for discussions and information exchange about the financial industry. While preparing for the launch, plaintiff invested considerable time and effort in developing the subreddit’s unique identity. This included creating the WALLSTREETBETS logo, designing the site using CSS to modify Reddit’s template. Later he set up related online channels, including an Internet Relay Chat (IRC) chatroom, a Discord channel, and a Twitter account under the WALLSTREETBETS name. By 2020, the r/WallStreetBets subreddit had amassed over a million followers.

Reddit Got Mad

The conflict took shape when plaintiff filed an application to register the WALLSTREETBETS trademark with the USPTO in March 2020. Reddit subsequently suspended plaintiff’s account for a week, citing his attempt to monetize the community, and barred him from moderating on the platform. In January 2022, plaintiff filed to register the mark WSB, and the USPTO granted this registration in June 2022.

Then There Was Litigation

Plaintiff sought a declaratory judgment – which in this case was a request for the court to acknowledge his ownership of the WALLSTREETBETS and WSB trademarks. He also made a claim against Reddit for infringing these trademarks, together with various other claims arising under state law. On the infringement issue, his theory was that he did not give Reddit permission to use the WALLSTREETBETS trademark following his ban as a moderator of the r/WallStreetBets subreddit he created.

The court dismissed Plaintiff’s first complaint, which he filed in February 2023. That dismissal, however, came with the opportunity for plaintiff to amend his complaint to address these issues. Despite his efforts to fix the identified shortcomings in his amended complaint, Reddit argued that he had still failed to meet the necessary legal standards. The court agreed and dismissed the case again.

Court Says the Rights are Reddit’s

The Court’s placed significant emphasis on the principle of “first use in commerce,” a critical element in establishing trademark ownership. In his amended complaint, plaintiff attempted to demonstrate his early and significant involvement in the development and use of the trademarks in question. He detailed his efforts in creating the logo, designing the subreddit, and establishing associated online channels. However, the court remained unconvinced by these assertions, noting that plaintiff’s actions did not meet the threshold of “use in commerce” as required by trademark law. The Court also scrutinized the timing and nature of plaintiff’s activities in relation to the establishment and popularity of the subreddit, ultimately finding that these actions did not suffice to establish his ownership of the trademarks.

And the case addresses the interesting issue of who owns trademark rights in a user-generated community – the platform or the moderator/creator? Reddit asserted that it owned the trademark rights in the community. Specifically, citing a case from the USPTO’s Trademark Trial and Appeal board, In re Florists’ Transworld Delivery Inc., 2016 WL 3998062 (T.T.A.B. May 11, 2016), Reddit had argued that account holders like plaintiff “generally will not be able to rely on use of [their] social media account to support an application for registration of a mark for such service.” Reddit argued that “[j]ust as the applicant in In re Florists’ Transworld could not claim rights in connection with ‘creating an online community’ based on use of Twitter, Plaintiff cannot rely on his use of Reddit’s platform to support alleged service mark rights in connection with a ‘web based community'”.

Regarding the state law claims, the court looked to 47 U.S.C. 230, which provides immunity to providers of interactive computer services from liability for content posted by others. The court found that these claims, as presented, did not get around Reddit’s Section 230 immunity.

Rogozinski v. Reddit, Inc., 2024 WL 150727 (N.D. California January 12, 2024)

Read Franklin’s post at Creator Economy Law.

See also:

January 10, 2024 Cybersquatting, Trademarks

No ACPA injunction because mark was not distinctive when domain name first registered

ACPA

This case had a bit of a weird result – even though the brand owner had a mark that was 20 years old, and the alleged cybersquatter in the meantime acquired a domain name on the open market identical to that mark, because the domain name was first registered (by an unrelated party) before the brand owner’s trademark rights arose, there was no relief under federal trademark law. One may question whether such a result creates a loophole for bad faith actors.

History of registration and rights

Someone – no one seems to know who – first registered the disputed domain name <trx.com> back in 1999. In 2003, plaintiff’s successor in interest (via bankruptcy) began using the trademark TRX, thereby acquiring rights in the mark. Defendant bought the domain name in 2022.

Plaintiff sued defendant under the Anticybersquatting Consumer Protection Act (ACPA), a part of U.S. trademark law that deals with bad faith domain name registration. Plaintiff sought a preliminary injunction ordering the transfer of the disputed domain name pending resolution of the lawsuit. The court denied the motion because it found that plaintiff had not established that plaintiff would likely succeed on the merits of the cybersquatting claim.

Outcome up for critique

The legal holding is potentially problematic, however, and represents a point on which different federal courts sitting in different parts of the country handle cybersquatting claims differently under the ACPA.

In this case, the court held that plaintiff’s cybersquatting claim depended on when the disputed domain name was first registered. Citing to a 2023 case from the same district, Blair v. Automobili Lamborghini SpA, which in turn relied on the Ninth Circuit’s opinion in GoPets Ltd. v. Hise, 657 F.3d 1024 (9th Cir. 2011), the court explained that liability for cybersquatting is possible “only when a person other than the trademark owner registers a domain name that is confusingly similar to a trademark that is distinctive at the time of the domain name’s registration.” It went on to note that “[i]n other words, if a domain name is registered before a particular trademark exists, the trademark owner cannot assert a viable cybersquatting claim against the domain name owner.”

So under this logic, because the domain name was registered prior to 2003 (when the rights in the TRX mark came into existence), there is no way plaintiff’s TRX mark could have been distinctive at the time of the domain name’s registration. The court came to this conclusion even though the record demonstrated that some unknown person, other than defendant, first registered the disputed domain name, and that defendant first acquired the domain name on the market many years after the TRX mark had become distinctive.

It is interesting to note that this outcome conflicts with decisions in other circuits that hold “re-registration” by a new owner counts as the time for evaluating whether a mark with which a domain name may be confusingly similar, is distinctive. See, e.g., Instructure, Inc. v. Canvas Technologies, Inc., 2022 WL 43829 (D. Utah, January 5, 2022). One could argue it is bad policy for the ACPA system to essentially absolve a bad faith actor who acquires a domain name that contains a protectible mark but was first registered by someone else not acting in bad faith, prior to the time the mark became strong.

JFXD TRX ACQ LLC, v. trx.com, 2024 WL 98424 (D. Ariz., January 9, 2023)

See also:

July 24, 2023 Trademarks

When X makes it an ex-brand: Can a company retain rights in an old trademark after rebranding?

This past weekend Elon Musk announced plans to rebrand Twitter as X. This strategic shift from one of the most recognized names and logos in the social media realm is stirring discussion throughout the industry. This notable transformation raises a broader question: Can a company still have rights in its trademarks after rebranding? What might come of the famous TWITTER mark and the friendly blue bird logo?

Continued Use is Key

In the United States, trademark rights primarily arise from the actual use of the mark in commerce (and not just from registration of the mark). The Commerce Clause of the United States Constitution grants Congress the power to regulate commerce among the states. Exercising this constitutional authority, Congress enacted the Lanham Act, which serves as the foundation for modern trademark law in the United States. By linking the Lanham Act’s protections to the “use in commerce” of a trademark, the legislation reinforces the principle that active commercial use, rather than mere registration, is a key determinant of rights in that trademark. So, as long as a company has genuinely used its trademark in commerce (assuming no other company has rights that arose prior in time), the company retains rights to that mark.

Though a company may transition to a new brand identity, it can maintain rights to its former trademark by continuing its use in some form or another. This might involve selling a limited line of products under the old brand, using the old brand in specific regions, or licensing the old trademark to other entities. Such actions show the company’s intent to maintain its claim and rights to the mark—such rights being tied strongly to the actual use of the mark in commerce. No doubt continued use of the old marks after a rebrand can be problematic, as it may paint an unclear picture as to how the company is developing its identity. For example, as of the time of this blog post, X has placed the new X logo, but still has the words “Search Twitter” in the search bar. And there is also the open question of whether we will in the future call content posted to the platform “tweets”.

Avoiding Abandonment

If a company does not actively use its trademark and demonstrates no intention to use it in the future, it runs the risk of abandonment. Once a trademark is deemed abandoned, the original owner loses exclusive rights to it. This is obviously problematic for a brand owner, because a third party could then enter the scene, adopt use of the abandoned mark, and thereby pick up on the goodwill the former brand owner developed over the years.

What Will Twitter Do?

It is difficult to imagine that X will allow the TWITTER mark to fall into the history books of abandoned marks. The mark has immense value through its long use and recognition—indeed the platform has been the prime mover in its space since its founding in 2006. Even if the company commits to the X rebranding, we probably have not seen the end of TWITTER and the blue bird as trademarks. There will likely be some use, even if different than what we have seen over the past 17 years, to keep certain trademark rights alive.

From the archives:

Is Twitter a big fat copyright infringing turkey?

March 17, 2023 Contracts, Trademarks

The power of publicity and trademark use provisions in legal agreements

publicity agreement

In today’s brand-conscious marketplace, legal agreements between businesses often contain clauses allowing for publicity of the agreement itself and use of each other’s trademarks. This practice of mutual brand promotion can lend credibility to the involved parties and also serve as a powerful marketing strategy.

Understanding Publicity and Trademark Use Provisions

Publicity provisions in a legal agreement permit the parties involved to disclose specific details about their agreement to third parties. This could involve a simple announcement about the partnership or a more detailed disclosure about the agreement’s purpose and scope.

Trademark use provisions allow parties to use each other’s trademarks, logos, or brand names. This could be in marketing materials, on products, or in other forms of communication such as websites and social media content.

Why Include Publicity and Trademark Use Provisions?

While the specifics can vary, there are several general reasons why parties might wish to include these provisions:

Brand Awareness: Such provisions can help increase brand visibility and recognition, particularly when partnering with a well-known or highly respected company.
Credibility and Trust: The ability to publicize a partnership or to use a trusted brand’s trademark can lend credibility and foster trust among customers and stakeholders.
Market Penetration: For companies looking to break into new markets, a strategic partnership with a well-known brand can offer a significant advantage.

Key Considerations

Before including these provisions in an agreement, the parties should consider several key points:

Scope of Use: The agreement should clearly define what aspects of the agreement can be publicized and how each party’s trademarks can be used.
Quality Control: Trademark owners will want to ensure that their trademarks are used in a manner consistent with their own quality standards and brand identity.
Duration and Termination: It should be clear when the rights to publicity and trademark use begin and end, and what happens upon termination of the agreement.
Approval Process: Typically, any use of the other party’s trademark or any public disclosure of the agreement would require prior approval.
Indemnification: The agreement should include indemnification provisions to protect against any legal repercussions from the use of trademarks or publicity statements.

Publicity and trademark use provisions can be powerful tools in a legal agreement, offering enhanced brand visibility, credibility, and market penetration. However, they must be handled with care, considering the scope, quality control, duration, approval, and indemnification issues that may arise.

June 24, 2020 Licensing, Trademarks

Trademark license: 3 key ideas

A trademark license is important. Let’s say that your company is going to enter into an arrangement whereby it is going to manufacture and sell another company’s products, or your company is going to integrate another company’s services into its own offering. These could take the form of reseller agreements or distribution agreements.

A critical piece of that arrangement is a trademark license. Here are three key things to keep in mind when entering into a trademark license.

What trademarks are being licensed?

The first thing to keep in mind is that you will need to actually specify which marks are being licensed. Are they word marks? Logos? You will want to be precise about that, and the agreement should specify clearly which marks are the subject of the agreement. The parties should also define standards for how the marks should appear. And the agreement should contain minimum standards for the quality or performance of the goods or services that will be provided.

How will the marks be used under the trademark license?

The second thing to keep in mind when entering a trademark license is to determine how the marks are actually going to be used. Will they be affixed to the products? Are they going to be in product literature and marketing collateral? One must define the scope of the permitted use so that the parties have an understanding of the arrangement.

Quality assurance provisions

The third thing to keep in mind when negotiating a trademark license is the quality assurance provisions. A party granting rights may lose those rights if it does not have a meaningful remedy to stop wrong use. This may occur if the trademarks under the license agreement do appear as they should, or if the quality of the goods and services being provided does not meet certain standards.

Evan Brown is a technology and intellectual property attorney in Chicago. Need help? Call Evan at (630) 362-7237 or set up a time to talk by emailing him at ebrown@internetcases.com.

April 6, 2020 Cybersquatting, Trademarks

Domain disputes under federal law can be inefficient

A recent case from a federal court in Kentucky shows why the Anticybersquatting Consumer Protection Act (15 U.S.C. 1125(d) – the “ACPA”) can be – compared to the Uniform Domain Name Dispute Resolution Policy (“UDRP”) – a relatively inefficient way of resolving domain name disputes under federal law.

Defendant was an infringer

Here is a quick rundown of the facts. Defendant owned a business directly competitive to plaintiff ServPro. Plaintiff had used its mark and trade dress since the 1960’s. Defendant set up a website using plaintiff’s color scheme, bought Google AdWords triggering ads showing plaintiff’s mark, and registered a domain name identical to plaintiff’s mark – servpro.click. These facts supported the court’s entry of summary judgment in plaintiff’s favor on the question of trademark infringement. But the ACPA claim got the court got hung up because of some hard-to-believe facts the defendant put forward.

What the ACPA requires

The ACPA requires a plaintiff to prove bad faith intent to profit from the disputed domain name. And it gives courts a list of nine things that a court can consider in determining this bad faith. In other words, this list is not the be-all and end-all guide for determining ACPA bad faith. Here are the nine things a court should consider in resolving domain name disputes under federal law:

(I) the trademark or other intellectual property rights of the person, if any, in the domain name;

(II) the extent to which the domain name consists of the legal name of the person or a name that is otherwise commonly used to identify that person;

(III) the person’s prior use, if any, of the domain name in connection with the bona fide offering of any goods or services;

(IV) the person’s bona fide noncommercial or fair use of the mark in a site accessible under the domain name;

(V) the person’s intent to divert consumers from the mark owner’s online location to a site accessible under the domain name that could harm the goodwill represented by the mark, either for commercial gain or with the intent to tarnish or disparage the mark, by creating a likelihood of confusion as to the source, sponsorship, affiliation, or endorsement of the site;

(VI) the person’s offer to transfer, sell, or otherwise assign the domain name to the mark owner or any third party for financial gain without having used, or having an intent to use, the domain name in the bona fide offering of any goods or services, or the person’s prior conduct indicating a pattern of such conduct;

(VII) the person’s provision of material and misleading false contact information when applying for the registration of the domain name, the person’s intentional failure to maintain accurate contact information, or the person’s prior conduct indicating a pattern of such conduct;

(VIII) the person’s registration or acquisition of multiple domain names which the person knows are identical or confusingly similar to marks of others that are distinctive at the time of registration of such domain names, or dilutive of famous marks of others that are famous at the time of registration of such domain names, without regard to the goods or services of the parties; and

(IX) the extent to which the mark incorporated in the person’s domain name registration is or is not distinctive and famous within the meaning of [the Lanham Act].

The court’s decision on cybersquatting

The court found that factors I through IV and IX weighed in plaintiff’s favor. But the court found there to be a genuine issue as to factor V and denied summary judgment. It found that defendant had an intent to divert plaintiff’s customers.

Defendant asserted he did not purchase the servpro.click domain name intending to divert customers from plaintiff for defendant’s gain. Instead, he alleged that he registered the domain name to collect information and perform analytical research for running Google AdWords. He also alleged that the website the domain name pointed to did not advertise that it was ServPro. And the contact information on the website pointed to his personal cellphone. He alleged that when answering calls made to that number, he identified himself as affiliated with his company and never identified himself as affiliated with plaintiff.

The court probably had difficulty denying summary judgment
in a situation where the facts alleged are so hard to believe. A court’s role at the summary judgment stage, however, is not to weigh the evidence, but merely to determine whether there is a factual issue for trial. The time for really ascertaining the truth of defendant’s assertions will come later.

Was the ACPA too cumbersome for this case?

In any event, these flimsy arguments remaining alive far into expensive litigation underscores how domain disputes under federal law are more cumbersome . The marshaling of evidence, briefing and argument in federal court can easily rack up six-figures in attorney’s fees and costs. Even after that effort, the summary judgment standard provides little assurance a party arguing against thin facts will get relief. Had the parties resolved this dispute under the UDRP and not the ACPA, plaintiff’s arguments would have had more success.

ServPro Intellectual Property, Inc. v. Blanton, 2020 WL 1666121 (W.D. Ky. April 3, 2020)

Court orders transfer of domain name at preliminary injunction stage of trademark case

March 26, 2020 Computer Crime, Cybersquatting, Trademarks

How companies can use their trademarks to combat COVID-19-related phishing

Straightforward out-of-court domain name proceeding can provide efficient relief against fraudulent websites and email.

Google has seen a steep rise amid the Coronavirus pandemic in new websites set up to engage in phishing (i.e. fraudulent attempts to obtain sensitive information such as usernames, passwords and financial details). Companies in all industries – not just the financial sector – are at risk from this nefarious practice. But one relatively simple out-of-court proceeding may provide relief.

Varieties of Phish Species

Phishing schemes can take a variety of forms. A fraudster may register a domain name similar to the company’s legitimate domain name and use it to send email messages to the company’s customers, requesting payment and providing wire instructions. Distracted or untrained customers who receive the email may unwittingly wire funds as instructed in the fraudulent email to an account owned by the criminal. Or the phishing party may set up a legitimate looking but fake website at a domain name similar to the company’s legitimate domain name, and direct users there to purportedly log in, thereby disclosing their usernames, passwords, and perhaps additional sensitive information.

Taking Sites Down with the UDRP

Everyone who registers a domain has to agree, by contract, to have disputes over the domain name’s ownership resolved through an administrative proceeding (similar to arbitration). The Uniform Domain Name Dispute Resolution Policy (UDRP) governs disputes over .com, .net, .org and many other domain name registrations. The World Intellectual Property Organization (WIPO) provides administrative panels who decide disputes under the UDRP. These are decided “on the papers” with each party having the opportunity to submit arguments and supporting documentation. The time and expense of a UDRP proceeding is a small fraction of what one sees in typical litigation – UDRP cases usually conclude within weeks, and generally cost a few thousand dollars.

The UDRP Frowns Upon Phishing

To be successful in bringing a UDRP proceeding, a party has to prove (1) that it owns a trademark that is identical or confusingly similar to the disputed domain name, (2) that the party that registered the disputed domain name has no rights or legitimate interests in the disputed domain name, and (3) that the disputed domain name was registered and has been used in bad faith.

UDRP panels typically show little tolerance for blatant phishing efforts. Companies bringing UDRP actions against registrants of domain names registered for phishing purposes enjoy a high rate of success. A good phishing effort (that is, “good” in the sense that the fake domain name succeeds in deceiving) will require using words similar to the company’s mark. So the first element is usually a low hurdle. On the second and third elements, UDRP panels are readily persuaded that a party using a disputed domain name for phishing gains no rights or legitimate interests, and demonstrates clear bad faith. “Using the disputed domain name to send fraudulent email is a strong example of bad faith under the [UDRP].” Samaritan’s Purse v. Domains By Proxy, LLC / Christopher Orientale NA, WIPO Case No. D2019-2403

October 9, 2019 Trademarks

Seventh Circuit requires trademark defendants to pay plaintiff’s attorneys’ fees

Court held this was an “exceptional case” and that trial court judge should have awarded plaintiff its attorneys’ fees under the Lanham Act.

While it is fairly common for successful litigants in copyright cases to be awarded the attorneys’ fees they incur in bringing or defending the case, that fee-shifting is not as common in trademark cases. There is a higher standard that must be met in trademark cases – the prevailing party must show that it has won an “exceptional case”. That recently occurred in the Seventh Circuit Court of Appeals.

Plaintiff home remodeling company and defendants – a manufacturer of storm shelters and one of its owners individually – found themselves in a trademark dispute over rights to use a mark plaintiff had developed to use as a distributor of defendants’ storm shelters.

Defendants disregarded on oral license agreement it had with plaintiff and used the mark for years outside the territorial scope of the license. The evidence showed that defendants intended to just buy the mark in the event plaintiff noticed defendants’ out-of-scope use.

Plaintiff indeed noticed and sued. The trademark infringement case went to trial. The trial court – though it found in plaintiff’s favor on the liability question and awarded more than $17 million in damages to plaintiff – declined to order defendants to pay plaintiff’s attorneys fees. Plaintiff sought review of the denial of attorney’s fees with the Seventh Circuit.

On appeal, the court reversed and remanded. It found that the trial court’s findings made this an “exceptional case” and thus appropriate for an award of attorneys’ fees.

Specifically, the court found that defendants’ conduct was willful, egregious and intentional. Likewise, defendants had acted in bad faith and maliciously, and refused to cease infringing activity, causing plaintiff unnecessary trouble and expense.

4SEMO.com Inc. v. Southern Illinois Storm Shelters, Inc., Nos. 18-1998 & 18-2095 (7th Cir., October 7, 2019)

About the Author: Evan Brown is a Chicago technology and intellectual property attorney. Call Evan at (630) 362-7237, send email to ebrown [at] internetcases.com, or follow him on Twitter @internetcases. Read Evan’s other blog, UDRP Tracker, for information about domain name disputes.