Darin M. Klemchuk Roxana Sullivan

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					                         Darin M. Klemchuk
                         Roxana Sullivan

Monday, April 26, 2010
Monday, April 26, 2010
      Topics Covered:




Monday, April 26, 2010
      Topics Covered:

       1. Social Media as the New Marketing Tool
       2. Practical Steps of Protecting Brands in Social Media
       3. Think Twice Before Filing Suit
       4. Lanham Act Considerations for Social Media
       5. Employee Policies (FTC)




Monday, April 26, 2010
                    Part 1: Social Media as the New Marketing Tool




Monday, April 26, 2010
Monday, April 26, 2010
      •    Facebook has more than 350 million active users.
      •    Twitter now boasts around 32.1 million users.
      •    MySpace attracts about 115 million people to its site each month.
      * 18-21 year olds do not watch television or read the newspaper!




Monday, April 26, 2010
              Confessions . . . .




                                    6


Monday, April 26, 2010
              Confessions . . . .

                     I don’t get it.




                                       6


Monday, April 26, 2010
              Confessions . . . .

                     I don’t get it.

                         40+




                                       6


Monday, April 26, 2010
Monday, April 26, 2010
     •   Pages: Customizable mini-sites geared toward organizations, products, or public personalities.
                - Fans become brand advocates.
                - Allows users to post comments, view news and information about a certain product,
                and learn more about a company.

     • 1.6 million active Pages

     • More than 700,000 local businesses have created Pages to reach their target demographics

     • It is estimated that pages have created more than 5.3 billion fans

     • Every time a Page has activity, such postings or announcements, this activity becomes visible on
     the News Feed of its fans.

     • Ranks high with search engines (much bigger issue than cyber-squatting)

     • Creates SEO problems



Monday, April 26, 2010
Monday, April 26, 2010
   • Facebook requires the creator of a Page to be the official representative of an
   organization. (You can register your business/brand with Facebook).

               - How is this monitored?


   • As such, the representative becomes the Page Organizer, able to add and remove
   content, manage the information appearing on the site, and increase the viral effects of
   the advertising.

   • Each Page comes equipped with pre-selected formatting options.

               - Discussion Boards, Events, Information about the organization, and Photos

   • The Info tab allows companies to share key information such as the website, mission,
   overview of the business, and products.


Monday, April 26, 2010
       Questions to Consider…!
         1. Posing - How can businesses prevent third-parties from creating a Page or
         creating a profile on Twitter or Myspace or some other form of social media site
         that uses the company’s trademark?

         2. Infringement - How can businesses protect their brand on social networking
         sites?




                                                                                 9


Monday, April 26, 2010
              Confessions . . . .




                                    10


Monday, April 26, 2010
              Confessions . . . .

                     Klemchuk Kubasta LLP has a Facebook Page




                                                                10


Monday, April 26, 2010
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Monday, April 26, 2010
          Part 2: Practical Steps of Protecting Brands in Social Media




Monday, April 26, 2010
       Terms of Use for Social Networking Sites!




                                          14


Monday, April 26, 2010
          MySpace Terms of Use!
           • MySpace encourages trademark owners to first resolve disputes directly with
           alleged infringer.
           •    Can contact MySpace at trademark@support.myspace.com
           • MySpace reserves the right to investigate and take appropriate legal action
           against anyone who “violates or attempts to violate the privacy rights, publicity
           rights, copyrights, trademark rights, contract rights, or any other rights of any
           person.”
           • Illegal activity under the MySpace Terms of Use: copyright infringement,
           patent infringement, theft of trade secrets, impersonating or attempting to
           impersonate another member, person, or entity, or selling or transferring your
           profile, email address, or URL.




                                                                                   15


Monday, April 26, 2010
        Twitter Rules!
        • Twitter does not monitor user’s content and will not censor such content except
        in limited circumstances.


        • Does not allow impersonation of others that does or is intended to confuse,
        mislead, or deceive others.


        • Twitter reserves the right to reclaim usernames on behalf of businesses or
        individuals that hold legal right or trademarks in those user names.




                                                                                16


Monday, April 26, 2010
Monday, April 26, 2010
      • May be as easy as registering your brand as a username


      • Don’t have to maintain an active account


      • EXCEPT Twitter (6th month deletion – to protect against squatters)


      •    LinkedIn (Requires an association between the registrant and the company)




Monday, April 26, 2010
            eBay!
        Company can set up an About Me page
         • Allows sellers to inform customers about their company, the products, and the intellectual
           property the company owns
         • Can upload the company logo to build brand recognition
         • Link to brick-and-mortar storefronts
         • Let eBay users know who you are
         • Provide tips to users on how to spot obvious fakes
         • Offer a contact point for users to ask you questions or report infringing items to you
         • Promote your products and sell the message that only genuine items are worth buying
         • Once the company has posted the About Me page, the company can send an email to
           eBay’s VeRO program to be included in the list of VeRO Participant About Me pages.
         • http://pages.ebay.com/help/community/vero-aboutme.html




                                                                                                    19


Monday, April 26, 2010
      •      Have a few employees or outside contractors regularly check social networking
             sites for unauthorized use of your brand.
      •      Check for bad press, trademark infringement, and the sale of counterfeit goods.
      •      eBay: Can set up a favorite searches to monitor certain vendors who may have
             sold counterfeit goods.
      •      Icerocket.com, Google.com/alerts, and technorati.com search blogs, Twitter,
             Myspace, and news groups.




Monday, April 26, 2010
Monday, April 26, 2010
      • Join the online community.
      • Create your own positive buzz.
      • Can facilitate conversations, promote its products/services, and build up one’s
      brand.
      • Creating an account can be an effective way to rehabilitate your brand after it has
      been damaged.
      • Relatively inexpensive way to advertise and reach consumers that may not
      otherwise be reached with traditional forms of advertising.
      • Can share positive information about your mission, overview of the business, and
      products.




Monday, April 26, 2010
Monday, April 26, 2010
      • Use terms of use policies to protect rights.
            - All 3 – Facebook, MySpace, Twitter – Have terms of use policies

            - Twitter – Don’t usually censor content, but has mechanism to reclaim a user name

             (To prevent squatting, suspends accounts with more than 6 months inactivity)

      •    Call In-House Counsel


      •    Litigation




Monday, April 26, 2010
                         Part 3: Think Twice Before Filing Suit




Monday, April 26, 2010
   • Analyze the seriousness of the offense before acting.

   • Taking a tough role against a fairly harmless infringer can backfire and
   cause negative press.

         • Ex.: Northface v. South Butt
         • May be more effective to send a gentle letter explaining the importance of the marks

   • Make use of dispute resolution mechanisms found in Terms of Use
   Agreements.

   • Tougher approach may be necessary…




Monday, April 26, 2010
   • Analyze the seriousness of the offense before acting.

   • Taking a tough role against a fairly harmless infringer can backfire and
   cause negative press.

         • Ex.: Northface v. South Butt
         • May be more effective to send a gentle letter explaining the importance of the marks

   • Make use of dispute resolution mechanisms found in Terms of Use
   Agreements.

   • Tougher approach may be necessary…




Monday, April 26, 2010
   • Analyze the seriousness of the offense before acting.

   • Taking a tough role against a fairly harmless infringer can backfire and
   cause negative press.

         • Ex.: Northface v. South Butt
         • May be more effective to send a gentle letter explaining the importance of the marks

   • Make use of dispute resolution mechanisms found in Terms of Use
   Agreements.

   • Tougher approach may be necessary…




Monday, April 26, 2010
                                                                                       Randy Whattoff


     The North Face is a company built from the dreams of two young hiking enthusiasts. In 1966,
     they founded a small store in San Francisco where they designed and sold mountaineering
     equipment and apparel. They named their store “The North Face” – evoking a mountain’s
     north face, generally considered the most difficult face to climb.
     The parties in this case are a subsidiary of a self-described “$7,000,000,000.00 plus
     powerhouse” and a college freshman. Plaintiff states in its Motion that Jimmy stands to lose
     “nothing more than profits.” Pursuit of the American Dream, freedom of speech, freedom of
     choice for consumers, and marketplace competition are all at stake.




Monday, April 26, 2010
                                                                                                   Randy Whattoff


     While the North Face logo is “a stylized silhouette of Yosemite’s Half Dome peak,” the South
     Butt logo, called the “half ass,” is a “stylized silhouette of a rump.” While the North Face’s
     motto is “Never Stop Exploring,” the South Butt encourages its customer to “Never Stop
     Relaxing.”
     The earnest Winkelmann claims he came up with the clothing line in response to the North
     Face’s ubiquity at his high school.
     Jimmy found this phenomenon to be rather curious given that his classmates were not of the exploring ilk,
     purportedly being the market targeted by North Face. He found the sudden collective movement by his
     peers to own North Face products to be symptomatic of the modern consumer culture. Thus, as an
     antithesis to North Face, The South Butt was born.




Monday, April 26, 2010
      • The South Butt’s attorney, Albert Watkins, says the company was started by
      Winkelmann to help pay for college.


      “The South Butt has previously made it clear to the North Face that the consuming public is insightful
      enough to know the difference between a face and a butt,” he said in a statement.

      If you’re a Facebooker, you can take the “Face or Butt Challenge” quiz.




      So, what’s your position? Never Stop Suing or Turn the Other Cheek?




Monday, April 26, 2010
      ExNorthFaceCust said:
      Have the lawyers taken over at The North Face? The business folks need to get their hands back
      on the steering wheel!



      dbriere said:
      North Face needs to get some perspective.



      T.A.Nick said:
      Does the North Face think its customers are so stupid they can’t tell the two apart? Also, thanks to
      this lawsuit, they’ve brought even more attention to the South Butt site.




Monday, April 26, 2010
      Moral:
      Filing suit against a motivated defendant can cause real PR problems due to the nature
      of social media. Sometimes it is better to avoid the negative publicity.




Monday, April 26, 2010
Monday, April 26, 2010
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                 Part 4: Lanham Act Considerations for Social Media




Monday, April 26, 2010
Monday, April 26, 2010
      • DMCA may be helpful in copyright infringement cases

      • Many social networking websites have provisions compliant with DMCA
      requirements

      • DMCA does not provide protection from claims of trademark infringement




Monday, April 26, 2010
Monday, April 26, 2010
  • Inwood Laboratories, Inc. v. Ives Laboratories, Inc., 546 U.S. 84 (1982).
        •   Liability may be imposed where a manufacturer or distributor intentionally induces another to
        infringe a trademark or continues to supply a product to someone who the defendant knows or has
        reason to know is engaged in trademark infringement.




Monday, April 26, 2010
  • Inwood Laboratories, Inc. v. Ives Laboratories, Inc., 546 U.S. 84 (1982).
        •   Liability may be imposed where a manufacturer or distributor intentionally induces another to
        infringe a trademark or continues to supply a product to someone who the defendant knows or has
        reason to know is engaged in trademark infringement.


  •Tiffany (NJ) Inc. v. eBay, Inc., 576 F. Supp. 2d 463 (S.D.N.Y. 2008).
        • Tiffany’s responsibility, as the trademark owner, to police its own brand.
        • Where liability is premised on the conduct of a user of a venue, an initial threshold showing must
        be made that the defendant had direct control and monitoring over the means of infringement.
        • Liability must be premised on specific knowledge, not generalized knowledge.




Monday, April 26, 2010
  • Inwood Laboratories, Inc. v. Ives Laboratories, Inc., 546 U.S. 84 (1982).
        •   Liability may be imposed where a manufacturer or distributor intentionally induces another to
        infringe a trademark or continues to supply a product to someone who the defendant knows or has
        reason to know is engaged in trademark infringement.


  •Tiffany (NJ) Inc. v. eBay, Inc., 576 F. Supp. 2d 463 (S.D.N.Y. 2008).
        • Tiffany’s responsibility, as the trademark owner, to police its own brand.
        • Where liability is premised on the conduct of a user of a venue, an initial threshold showing must
        be made that the defendant had direct control and monitoring over the means of infringement.
        • Liability must be premised on specific knowledge, not generalized knowledge.


  •Louis Vuitton Malletier v. Akanoc Solutions, Inc., No. C 07-03952 JW (N.D. Cal. Dec.
  23, 2008).
        • Jury returned a verdict granting plaintiffs $32 million in judgment against the internet web
        hosting companies because they had received multiple notices from the trademark owners regarding
        counterfeit products on hosted sites, but failed to take action.



Monday, April 26, 2010
Monday, April 26, 2010
      • Curtis James Jackson, p/k/a 50 Cent v. Grupo Industrial Hotelero, S.A., 2009
      U.S. Dist. Lexis 116770 (S.D. Fla. Apr. 29, 2009).
            - Court considered wide distribution of the video and advertisements via the social
            networking sites in its calculation of damages:
                   “The presence and distribution of the Coco Bongo nightclub website on the internet is
                   extensive and sophisticated through both its appearance on various search engines and
                   its having been directly linked to numerous other websites, including travel-oriented
                   websites and social networking sites.”




Monday, April 26, 2010
Monday, April 26, 2010
      • Minnesota Public Radio v. Virginia Beach Educational Broadcasting
      Foundation, Inc., 519 F. Supp. 2d 970 (D. Minn. 2007).
            - Court considered the activity of Defendant on its Myspace page to determine if it would be
            subject to personal jurisdiction in Minnesota.
            - The court used the Zippo sliding scale test to determine the nature and quality of
            defendant’s presence on the Internet.
            - Court found Defendant’s presence fell in the middle of the Zippo sliding scale since
            visitors to Defendant’s Myspace page could listen to streaming live audio, post comments,
            and subscribe to Defendant’s blog. However, the evidence did not disclose intent on the part
            of Defendant to target its services to Minnesota residents.
            - Acquiring “friends” on Myspace from Minnesota was not found to be an active solicitation
            of those friends.




Monday, April 26, 2010
        Courts’ Prior Views of Domain Name
      Issues (in the Web 1.0 World of Websites) !




                                          37


Monday, April 26, 2010
        Courts’ Prior Views of Domain Name
      Issues (in the Web 1.0 World of Websites) !

        •    Knight-McConnel v. Cummins, 2004 U.S. Dist. LEXIS 14746
             (S.D.N.Y. July 29, 2004)

         –   Plaintiff claimed that Defendant was violating federal intellectual property law by linking her
             website to the plaintiff’s website without permission or authorization, and for using the
             plaintiff’s name in the post-domain pat of a URL.
         –   Court found that “Defendant’s use of the plaintiff’s name in the post-domain path of a URL and
             placement of URLs using the plaintiff’s name in the post-domain paths on chat forums,
             discussion boards, and search engines do not give rise to any source confusion.”




                                                                                               37


Monday, April 26, 2010
        •    Interactive Prods. Corp. v. a2z Mobile Office Solutions, Inc., 326 F.3d
             687 (6th Cir. 2003).

         –   The 6th Circuit held that the post-domain path is not likely to give way to a likelihood of
             confusion.
         –   Post-domain path is being used in a non-trademark way and that the post-domain path of a
             URL “merely shows how the website’s data is organized within the host computer’s files” and
             does not suggest an association between page and mark holder.




                                                                                                  38


Monday, April 26, 2010
    •   It is unlikely that the post-domain path of a URL would be deemed a domain name
        as used under the Anti-Cyberquatting Consumer Protection Act.


    •   Technically, the post-domain path is not a registered domain with a registrar and is
        merely a way a website’s data is organized within the host computer’s files.


    •   Therefore, it is unclear whether the registration of usernames on social networking
        sites would gain protection under the Anti-Cybersquatting Consumer Protection Act
        and whether the use of usernames alone would give rise to a likelihood of
        confusion.




                                                                                     39


Monday, April 26, 2010
              Twitter Cases




Monday, April 26, 2010
              Twitter Cases


      • LaRussa v. Twitter, Inc.
            - Someone registered LaRussa’s name as a username on Twitter and made unflattering
            comments.
            - LaRussa asserted claims for trademark infringement, cybersquatting, and violation of right
            of publicity.
            - Case was settled shortly after filing, the username was disabled, and Twitter transferred it
            to LaRussa.

      • Oneok, Inc. v. Twitter, Inc. (N.D. Okla.)
            - Oneok asserted trademark infringement due to a third-party’s registration of Oneok as a
            username. Alleged that Twitter failed to transfer the username before suit.
            - Dismissed the day after Complaint was filed



Monday, April 26, 2010
                         Part 5: Employee Policies (FTC)




Monday, April 26, 2010
Monday, April 26, 2010
Monday, April 26, 2010
Monday, April 26, 2010
Monday, April 26, 2010
     Effective Dec. 1, 2009

            - Guides clarify that advertising messages, regardless of the type of media used,
            presented as opinions of findings of a party other than the advertiser will be considered
            endorsements for the purpose of the FTC.

            - If bloggers receive samples or promotions from a company in return for press, then the
            blogger must disclose this information.




Monday, April 26, 2010
Monday, April 26, 2010
Monday, April 26, 2010
     • FTC Guides make clear that
     employees of companies will always
     have a material connection with the
     company, so any communication about
     the company or its goods/services will be
     considered an endorsement.

     • Businesses that use social networking
     sites and that designate employees to
     operate such sites, need to make sure that
     the relationship is disclosed.




Monday, April 26, 2010
      Employee policies should cover social media use, remind employees of
      responsibilities, and the non-disclosure of private company information.
      Examples: Social Media Policy adopted by Coca-Cola on Dec. 2, 2009

          - 	

 Covers expectations for associates’ behavior on personal or unofficial networking
          activities where they may refer to Coca-Cola and expectations for online spokespeople.
          - Spokespeople are to keep records of all communications regarding the company, to
          fully disclose affiliation with the company, and a reminder that information published
          online is permanent.

          - The policy adopts five core values:

                         (1) transparency in every social media engagement;
                         (2) protection of consumers’ privacy;
                         (3) respect of copyrights, trademarks, rights of publicity, and other third-party
                         rights in the online social media space including with regard to user-generated
                         content;
                         (4) responsibility in the use of technology; and
                         (5) utilization of best practices, listening to the online community; and
                         compliance with applicable regulations.


Monday, April 26, 2010
       •    See also: WOMMA (Word of Mouth Marketing Association) Ethics Code

             - WOMMA is an official trade association that represents the interests of the
               word of mouth and social media industry.

             - WOMMA Ethics Code was cited 18 times in the recent FTC Guidelines
               for Endorsements and Testimonials.

             - WOMMA members adopt certain standards:

                         • Disclosure of Identity
                         • Disclosure of consideration or compensation received
                         • Disclosure of relationship
                         • Compliance with FTC Guides
                         • Genuine honesty in communication
                         • Respect for venue
                         • Marketing with children and adolescents: No children under 13 in
                           any of its word of mouth marketing programs or campaigns
                         • Compliance with media-specific rules
                                                                                              46


Monday, April 26, 2010
Monday, April 26, 2010
Monday, April 26, 2010
      • Register your brand.

      • Have a monitoring system in place.

      • Take an active role in social networking sites.

      • Determine your pain tolerance before reacting.

      • Implement an Employee Policy that addresses social networking conduct.




Monday, April 26, 2010
                         Find us on Facebook




                                               48


Monday, April 26, 2010
                         For more information, please contact:

                            Darin M. Klemchuk
                         KLEMCHUK KUBASTA LLP
                               214-367-6000
                             darin@kk-llp.com
                              www.kk-llp.com


Monday, April 26, 2010
                         For more information, please contact:

                            Darin M. Klemchuk
                         KLEMCHUK KUBASTA LLP
                               214-367-6000
                             darin@kk-llp.com
                              www.kk-llp.com


Monday, April 26, 2010

				
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