"Powerful Stuff. What Every Domainer Needs To Know About The Law!"
"Great article For the first time I understand why someone
can take a generic domain name from someone."
Enrico Schaefer is a leading Internet, domain, and intellectual property law attorney. Arguably, one of the most experienced attorneys in Internet domain and trademark law, Schaefer has tried negotiated cases related to Internet and domain law, cybersquatting actions, intellectual property, UDRP and intellectual property licensing. As founders of Traverse Legal, PLC in Traverse City, Michigan, Schaefer has represented plaintiffs and respondents and has among his clients some of the largest companies in the world in domain name, trademark and related matters.Final installment on our 3 part installment of Enrico Schaefer's interview with DomainSuccess.com's Jeff Zbar as he takes domainers questions from the audience
To catch up....
Part One
Part Two
Enrico: And so, there's no down side to it from a defense standpoint. It's not going to hurt you any more than you're already hurt by holding them. So, I would say it's a good idea. I will tell you that a lot of domainers simply register domains in really what is false registering information because if the domain is ProfitableBusiness.com, they'll list the registrant as profitable business. That's not going to get you very far in terms of insulating yourself from liability, number one. Number two, it kind of smells like bad faith. And number three, we're seeing an awful lot of activity on accurate "who is" information. So, one of the elements of bad faith is inaccurate. If you are going to hold your portfolio, you should do so as an LLC with this caveat. Remember, we talked about how every time there's a new registrant, it starts the clock again. This is one of the challenges that you face in dealing with this, should I change the registrant information to a LLC. It's going to appear publicly as though the domain was transferred.
Now, you can come in and defend under the UDRP and say, "I'm the same person," but you're already at the arbitration at that point. So, you just have a little bit of risk that someone's monitoring a domain that you had before they had a trademark, and now they see a change in the registrant. So now they figure they can go and bring an UDRP.
Jeff: Okay. We have some more questions out there. We'll get to them momentarily. Do me a favor, people. If you're watching, I have a lot of questions that have been asked, but if you want to ask it in person, I can pull you off mute. Please click the little "raise your hand" icon up there for raised hand. Otherwise, I'll just read your questions. Sometimes, you can be a little shy, and I don't want to put anyone on the spot.
So, what about redirects? I guess we got into a little bit of that. Now, is there's any more to expound on redirects and whether they can put a domain or, in this case, an entire portfolio in jeopardy?
Enrico: Well, let me talk a little bit more, Jeff, about how some of the other redirects that obviously domainers see out there on both sides. Obviously, it's a big issue, because what typically will happen to a redirect is someone will have in their portfolio a bunch of domains, but they're really trying to focus on one particular domain. So, they'll just have everything redirect to the that domain which will be parked. Redirects, really they don't pass the smell test oftentimes. Obviously, if you're going to redirect to the competitor of the trademark holder, we all know how that's going to work out. But, if you're redirecting to something completely unrelated to anything having to do with the trademark holder . . .
So, let's say that you've got Apples.com and instead of parking that page, you're redirecting that to a parked page which is showing a bunch of everything. But for whatever reason, the software is not kicking out computer ads, it's kicking out all kinds of different stuff on business cards or what have you. So, you don't have the problem of appearing to be competitive with the trademark holder. So, that's good. Where you take a step backward is on the issue of whether or not you have a legitimate interest in the domain, a legitimate business interest in the domain. If you're redirecting, it doesn't appear that you're using that domain for anything. It's tough to make the argument that I've got this domain and my legitimate business interest to redirect to another domain. So, it's a small step backwards but one nonetheless.
The other thing is if that Apples.com traffic is going to a parked page, then that parked page the software is eventually going to start spitting out a bunch of computer ads. So, you kind of lost control. If, however, you are redirecting into an affiliate program where it's going to a client's particular page, again you're safer than if you are parking with competitive ads, but you're not completely out of the woods because you've got this legitimate business interest.
Jeff: Okay. A couple more questions out there. We have, bear with me one second, we have someone who had a question, and I want to go back up there. David Webb, let's put that out to David Webb. I believe you had a question. Are you there, David? David, are you there? Okay, maybe not. We're going to throw that one back on mute.
Let me ask another question from our list of questions. Let's change gears just a little bit. If we have more questions in this area if, we can come back to it. RSS feeds, a lot of people like to feed content to a site, making it a little bit more sticky, a little bit more traffic to create some awareness. What about copyright and RSS feeds? How is that? How should we be handling that?
Enrico: Well, RSS are fairly safe, typically. Copyright law is trying to keep up with all this technology. People say, what is Internet law? Well, we do have some special statutes in the UDRP and the ACPA which were designed specifically for the Internet. But by and large Internet law is trying to take all these traditional principles of, for instance, contracts, terms of use. How is that enforced in cyberspace? People are never sitting across the table from each other over a contract. How does copyright law work with all these new technologies which distribute what would otherwise be copyright protected information?
But RSS feeds are fairly safe in that copyright violations look at a whole range of factors in order to determine whether or not your use of the copyright content is fair use. So, just because something is copyright protected doesn't mean you can't use it. The First Amendment protects a lot of space around copyright. So, I could take anything from CNN, a quote from a CNN article and say, "This is bull. I disagree with this." That's called fair commentary. That's fair use. How much of the total work you are using of the copyright protected work is one of the factors. Well, an RSS feed, you're typically pulling the title and a hyperlink.
So, that's a really good defense to a copyright claim on a RSS feed because if it's a long article, great. Now, some of you have probably heard that the AP actually took issue with people pulling its AP feeds into their sites and eventually backed off somewhat from that. So, RSS feeds, like everything else, there's always room to argue here. The factors will be how much of the content are you using. Is it fair use?
Now, the factors against you are that you're providing no commentary around that content. And if your whole site is RSS feeds and you're just simply pulling in other people's content and there's nothing more going on in that site, you're going to have a very weak fair use defense. If there's nothing else going on in that site except PPC ads, you're a little better off, but you still have some risk.
As a practical matter, what I would tell you is if someone complains about you pulling in their feeds, pull it down because you could get a DMCA, a Digital Millennium Copyright, notice to your host, to your parking company that says, "I'm the copyright holder of this content," and all of a sudden your site is turned off. So that's the risk. And this feeds very well into some of the things that we're about to talk about, which is development.
None of us are surprised that the world does not think that parked pages are legitimate content. The bias against parked pages has been there for a long time and probably isn't going anywhere any time soon. It's great that Google, at least, got one foot in the water and is allowing ads to be displayed there. It's great that all these parking companies are developing great software around that, but the more developed your domain is from a judge's perspective or a layman's perspective, the more legitimate you are. So, a site that is designed only to pull in RSS feeds, other people's content and is pulling in the title, the hyperlink, and the entire article, you are copyright infringing. And if someone's registered that copyright with the copyright office, it's $150,000 in penalty damages plus attorneys' fees.
Jeff: Right.
Enrico: And so those scraping sites, bad idea. RSS feeds, title, hyperlink, you're probably going to be fined, and if someone complains, just simply go in a different direction.
Jeff: Talk to me a little bit about developing domains. There's a lot of talk about that. What do you see going on out there in that space?
Enrico: Well, there sure is. In the last 18 months, the conferences have all been involved about what? One thing, development. It's really interesting in my business because we represent the main interest. We represent the trademark interest. We have a very healthy, broad perspective on what's going on in the Internet space, but we also represent some of the most high traffic websites in the world, websites doing a billion downloads every couple of months, sites doing three to five million hits a day. And a lot of startup companies that end up doing very well, thank you, as a result of, not their domain name. Maybe the domain name is a significant piece of what they're doing, but content is where they are making money.
So, a little anecdotal story. We represented a guy out in California, a young guy, 22 or 23 years old. He ran a site called Bankaholic.com, and many of you may have read the articles about a year or so ago. We did all of his trademark work and protected all the imitators on the Bankaholic name. But, at some point, he did a deal with BankRate.com where they started displaying ads on his site. Well, he ultimately cashed out in a $15 million deal for Bankaholic.com, which is a blog custom designed with all kinds of bank rate and interest rate information. So, to us it's always strange that domainers can't seem to get their brains around development as being anything more than a more sophisticated parked page.
We understand all the arguments that, "Oh, I've got too many domains," and yada, yada, yada, and "I can't do it, and it's going to cost me $10,000." Look it, people. I understand domain names are worth money. It can be worth money, but there is as much or more money being made by people who actually spend time and money developing domains. You don't have to develop all your domains. And yes, you either have to have the skill set to develop, or you're going to have to pay someone to do it. But people are making a lot of money by developing.
So, we believe in content. We think that the future of the Internet is A+ content. If you manage to get that and develop a model on WordPress or even a Digg model, ClickSite or custom develop an eCommerce portal for affiliates, there's people that are making an awful lot of money out there. And if you're not doing it, you should learn how to do it.
If you make some money, you don't need a hundred time return on your investment or a ten time return on your investment. Reinvest some of that money in your best domains on A+ content. That is the future. The sooner domainers realize that, the better because there's no one in the industry more perfectly positioned to actually monetize that on a broader level across many domain names on a commoditized process basis than domainers.
And in all of the conferences that have been going on, of all the speakers that have spoke about development, I always come away from these conferences shaking my head and say, "Okay. How do I develop?" You develop with either a great application, great eCommerce, or great content, and over time those are going to be worth an awful lot of money.
We have affiliate clients who are doing $100,000 a month in affiliate revenue on marginal domain names, good but marginal domain names. So, there's money to be made out there outside the domain name itself.
Jeff: What about parking? What about particular issues with regard to parking?
Enrico: Well, you know, parking is a risk. It's an easy way, and you don't have to do much of anything to park a page and to try and tweak it a little bit and, hopefully, it makes some money. But you've got to understand that is typically exhibit A on any ACPA or UDRP complaint. It's the parked page selling competitive ads. So, again, pull your best domains out of the parking portfolio if you're concerned about them. Do a trademark assessment or pay an attorney to do a trademark assessment of your highest value domains, so you can make intelligent business decisions based on real information and risk about those domains. It doesn't do you any good to bitch about trademark law. It's going nowhere. It's not going to change, except for, maybe, the worse for you.
So, smart domainers are trying to actually figure out how to make money off of trademarks. So, for instance, our Bankaholic client found a way to actually turn that into a valuable registered trademark protected asset. By the way, you don't have to have your trademark registered with the USPTO or anywhere else in order to have trademark rights. So just because it's not registered doesn't mean they don't have trademark rights. Common law trademark rights exist the moment you start doing business and commerce as a brand. It's a little bit weaker. Look, if it's a mom and pop shop that no one would know existed and it happens to be a two-word generic, they're going to have a hard time showing much, if any, common law trademark rights, unless you attack them directly and show you know they exist. Use trademarks as a value added.
Your best domains, if they're two-word descriptive, chances are you can turn them into something suggestive in terms of what you're offering on that site and get the trademark registered for $1,100, if you use an attorney. And boom, you've just turned your domain into a trademark asset.
Jeff: Interesting. Let's switch gears a little bit here and talk about private transactions. For example, if I sell a high value domain in a private transaction, what type of contract should I be putting together for something like that?
Enrico: Well, if you are actually selling the domain, the things you need to be thinking about are this. The funny part is most of this stuff isn't in the Sedo type transaction system. You don't want to be warranting that you have trademark rights on the domain, okay? You want to put all of the risk on the buyer that three months from now someone is going to come in and say, "That's my trademark."
And it happens all the time. We see it all the time. Someone buys a domain. They pay a lot of money, $80,000, $150,000 for a domain, and then all of a sudden it turns out that there's trademark rights on a two-word descriptive, and someone wants to take it for no compensation. So, if you're the seller you want to say, you want no warranties about the domain beyond the fact that you are the proper registrant of the domain. You haven't stolen it from someone.
If you are the buyer, you have two options. One, you want to try and get the seller to warrant it, or you need to do significant due diligence. Work with an attorney to make sure that if there are trademark rights on the domain, that the domain hasn't been used in an infringing way, to understand what class of goods and services the trademark deals with so that you're not going to step into that area with your use, and go in with your eyes open. Most people are going to disclaim the fact that they know what trademarks are out there, and so you're going to have to do your due diligence. So certainly protect yourself on the trademark side. If there's content on the site, you want to get, as a buyer, a warranty that they have rights to the content. If it appears to be original content, that's great. We all know how that goes. It's real easy to scrape someone else. So, if it's more than just RSS feeds getting pulled in, you better get a warranty that that is original content.
You certainly want to do a complete domain history. Domain Tools is, from my point of view, the best tool to use in order to research the history of a domain. Get an account at DomainTools.com, and they'll show you archived information. It doesn't show up in Archive.org a lot of times. They'll show you a complete "who is" history. You can even purchase the entire portfolio of the seller. If it turns out the seller's got questionable domains in there or has high turnover or whatever, then that's a potential problem.
Check the bulletin boards to find out whether there have been any complaints on the seller's name, the seller's email address, anything else you can find out about the seller. You don't want to be buying a stolen domain. We get cases all the time where we get people who are either trying to have us defend them because someone's trying to take their domain, and it turns out that the allegation is that it was actually stolen. As the attorney, it's very hard to unwind that and figure out who's telling the truth. But you certainly don't want to be the person buying what turns out to be a stolen domain.
The other things that we're seeing out there are lease or lease-to-own transactions. So, especially if you're good at developing the domain, you could actually lease the domain to someone and give them a right of first refusal on buying it at some point in time after they can taste the revenue that they might get off the domain.
Also, seller financing. So, if there's a domain out there for a million, two million bucks, a couple hundred thousand bucks that you want to buy and you've got a plan to monetize it, find some money for a down stroke and then essentially lease the domain and get an option to buy it at a strike price down the line. And then, use the revenue above and beyond your initial down stroke to actually pay for that domain over time. It works really well for an affiliate-type play where you know and you have high confidence because you've done the analytics to know that you're going to be able to do $100,000 a month in revenue. Paying a couple million bucks for a domain over a couple of years makes perfect business sense, and if you could put down a hundred thousand dollars and then get either a monthly payment or a right of first refusal, you'll be able to self-finance out of profits to purchase that domain.
Jeff: We had a question that went to the contract side, and I'm going to open it up. I think I had the name wrong before. It's Steven Webb. If you're out there and you care to ask your question about a Sedo sale that crosses borders. Steven, are you there? Okay, maybe not.
Here's what we're going to do. I'm going to go ahead and ask that question. Actually, it wasn't a sale. But if I win a domain at Sedo and the seller doesn't complete the sale, can I sue the seller for the domain in court in my country, i.e., Canada?
Enrico: Probably not. It happens all the time. Sedo sales, my big beef with Sedo is the fact that the sellers oftentimes are just testing the market. They're not serious, and when you put in that bid that matches what they were asking and assume that you've actually purchased the domain, if you look at the Sedo contract, you'll note that there's wiggle room on the back end for the seller to get out of the transaction. So, we've had lots of these situations come down the pipe. We've sent letters to Sedo trying to get them to actually force the transaction etc. They won't do it. Obviously, there are different Sedo models for buying and selling, and some of them are tighter than others.
But the first part of your question is really can you force the sale of that transaction? I will tell you it's very difficult. If it was a very high value domain, it might be worth it to take it to court and then, of course, the question becomes where. There's no completely definitive answer to that except to say that jurisdiction and venue are things that people fight about all the time in court. And so, if you go to where the seller is located, you're removing that venue and jurisdiction issue as an issue. So, if you just look to get at the merits of the thing, find an attorney who can bring suit where the seller is located. If you want to go somewhere else, if you want to take a look at the Sedo contract and see what that says about venue, if you want to go to the location of Sedo, those things might be fine. But it might also be fought about.
The chance of you actually pulling them into your jurisdiction, if they've never done anything there, is not likely. You probably cannot pull them into where you are located, unless there's what is called minimum contact, some sort of systematic and continuous presence in that state, something beyond your transaction.
Jeff: Another question. What should you say when someone calls to buy a domain name so that you don't get into issues or a UDRP challenge later? So, what should you say upfront so that you don't face a challenge down the road?
Enrico: Great question. And it's a very touchy, feely thing, and there's nothing that is going to be absolute. But what you want to say is essentially . . . let me just back up.
Under the UDRP, if you approach a trademark holder, you're toast. If a trademark holder approaches you, now you've got defenses. What you want to say is anything that's going to suggest that the domain really isn't for sale, but if they want to make an offer, go ahead and you'll run it by your partners. The key message being, I'm not trying to sell you this domain.
If you say something like, "Hey, that's great. We were really hoping you would contact us," which unfortunately I see all the time, you've just told the UDRP arbitration panel that, in fact, you knew they existed and, therefore, you knew their trademarks existed.
A lot of folks come to us and have us handle that. If you do it through counsel, it's even better protected as long as they know what they're doing and they don't use the wrong words. Again, the gist is you're not really looking to sell the domain, but if they want to go ahead and make an offer, you'll pass it on.
Jeff: Gotcha. Now, let's go back and try this one more time. If he's available, Steven Barkley, are you there? I think we caught somebody on the horn there. I was going to put it out there.
Let me ask another question. Bear with me. Someone said, "Should I get rid of the Olympics.tv?"
Enrico: You know, the answer to that is probably yes. It's trademark protected. There's actually special laws that were passed to protect the Olympics, if you can believe it. You certainly shouldn't monetize it in any way having to do with the Olympics at all.
Now, let me back up and say that there is an area where you can legitimately use someone else's trademark potentially. It's an emerging area of law. We've all heard the word "gripe" site, right? Well, there are also fan sites. There are sites where there's no monetization. There's no ads on the site. You're not trying to sell the domain. It doesn't say for sale. In those instances, you would have defenses of, basically, non-commercial use. So, you're not trying to financially benefit. But it's still a risky area, because look it, who wants to go to court? Who wants to pay an attorney tens or thousands of dollars or more to find out if you're right?
So, that kind of thing, there are probably some non-infringing uses out there in terms of fan or gripe. Although they're not perfect, the best gripe sites use the word "sucks" so that it's clear to any consumer that you're a gripe site. But if you made it clear that it's a gripe site or a fan site and you weren't monetizing it, you're, at least, going to have some defenses, which would allow you to just turn it over if anyone complained.
I'm sure there are companies and businesses out there called the Olympic, and so you could choose to develop it in a non-infringing way. There could be a skating rink called the Olympic. There could be different things that you could use it, but you'd have to develop the domain so that it was not non-infringing. So, those would be the options.
Jeff: A couple last questions. We're coming up on the hour. So, it's been a great hour invested here. When a company submits its products to Amazon, eBay, etc., are they condoning advertising of that product everywhere, including companies that signed on to sell products on that system, Amazon, eBay, etc.?
Enrico: No. And so, when you sell a product on Amazon, you as the trademark holder, of course, retain all your trademark rights, you retain all your copyrights to the images, etc. and text of descriptions of the product. So, if I understand your question correctly, it really becomes, can I now resell that product or try and sell that product? There's a lot of affiliate marketers who might try and get in on that game. Those affiliate agreements are typically extremely limiting in terms of trademark use and copyright use and authorized channels and the rest.
So, all of those rights are protected, and we have a lot of work where product owners are actually retaining us to remove infringing materials from eBay or materials that are listed at eBay from being sold by someone else, an unauthorized person under the trademarks brand somewhere else.
Jeff: Okay. Another question. What is your thought on Allpspgames.com?
Enrico: One more time on that one, Jeff.
Jeff: All PSP, PSP, I presume being the hand held games.
Enrico: Again, you're in a tough position. Assuming PSP meant Play Somewhere Playful, you're using as a tourist site, you always have that non-infringing development possibility, which maybe PlayStation would come in later and say, "Hey, we want to buy that domain off of that one." It wouldn't be a likely candidate for that. But if you're using it anywhere in the gaming sense, you've got a problem. If you're monetizing it with anything having to do with gaming, you've got a problem. Those are the types of companies that are monitoring the web and are trying to keep track of what's going on.
If you're lucky, they'll just send you a threat letter and you'll turn over the domain, and you'll be done. By the way, if you get one of those threat letters on one of your domains, just because you turned over the domain doesn't mean they can't come back and sue you. It's best to get what's called a release of liability, which says if I turn over my domain, you agree to release me from any and all liability for having registered the domain. Most companies, in exchange for getting it, are willing to enter into a release.
If they're not, you take some risk that they're going to get the domain from you, then come and sue you, which is what happened in our Navigation Catalyst, and we went out and got all the domains. I'm sure they thought it was over, and then we stepped into court under the ACPA and statutory damages, and they've got a big problem.
Jeff: If a parking company feeds trademarked products to your domain name, are they responsible for trademark issues should they arise?
Enrico: No, because those parking companies are typically displaying Google ads. And so, when the trademark holder puts their advertisement with their keyword triggers and their header text and their descriptive text into Google, they are implicitly authorizing that to be displayed throughout the network.
And it's a good question because it raises this issue. There is this kind of implied rights argument that comes up oftentimes, where if you put your trademarks and copyrights into a particular distribution channel, you implicitly allow everyone who's displaying that to do so. So, not a problem. Google's got that covered. It's part of their agreement with the AdWords advertisers as well. So, you're good to go, and they can always opt-out of the parked page model anyway as an advertiser.
Jeff: You spoke earlier about sale of domains and whether starting over versus the trademark on a name that's somebody else has a domain, too. Prefacing that that way, how about if you bought as an individual and then you later . . . let me read this again. How about if you bought as an individual and then you later, I guess, bought from a corporation, does the clock start again? I guess they're asking, does it matter who the seller or buyer is in a domain that . . .
Enrico: Yes.
Jeff: Yes. Go ahead.
Enrico: Yes, it does. I mean, look it. If you get dragged into the UDRP because there's been . . . let's say, in 2005, someone registers for a trademark. You had the domain in 2004. So you're out of harm's way, at least, under the UDRP.
If in 2009, there's a change in the registrant information and the trademark holder comes after the new registrant, if the new registrant is the same or related party to the first registrant, then you can make the argument that the initial registration date is the date by which we're measuring the merits. And as of the original registration date, there were no trademark rights.
So, you'd have to show that there was a relationship. Absent that relationship, you're going to be starting the clock again, and in 2009, it could be well after the trademark was registered in 2005, and you're going to have a problem.
Jeff: Similar question. This might be the same. And then, we're going to wrap it up. What if it's two companies, sounds like an SAT question again, two questions.. What if it's two companies that merged together and you bought the name before they merged together, but the domain includes both company names? Interesting caveat that I guess it's not related to that one. This is related to if you owned a trademark that then, I guess, got . . .
Enrico: It happens all the time.
Jeff: Okay.
Enrico: Mergers. It's an interesting question, because there are a lot of domainers out there who actually are trying to anticipate the markets, and in today's economy with everything going up in flames, there's a lot of mergers and acquisitions going on.
And so, the answer is, if there are two strong trademarks, it doesn't matter if you add any word to the end of it, if it incorporates, in part, their trademark, you've got a problem. So, let's say, you've got a domain name that's Merrill Lynch whatever, and then there's another company by the name of Equity Group. So, if you sensed that they were going to get bought and you had MerrillLynchEquityGroup.com, the fact that Merrill Lynch is in there, you're toast. If the other company also has strong trademark rights, too, you're double toast, but as long as those trademark rights stay intact.
So, there's a whole other portion of this law. Typically, they do, but as goods and services are, you can abandon your trademark. So if someone's no longer using the mark to sell goods and services and they intend to abandon those marks as to those goods and services, even if it's registered, there are no trademark rights. But then you're left to go challenge that trademark, either at the USPTO, at the Trademark Trial & Appeal Board, or in court.
Jeff: What if they're not? Let's say, that Microsoft and Sun Microsystems . . . not a what if here, but just humor me. Microsoft and Sun Microsystems decide to merge, and you heard it coming. You had whatever information. So, you created MicroSun and neither of which is . . . Sun is not and Micro is not trademarkable, so to speak. But you had that kind where both are generic, but together they create what becomes later a trademarked name, but you owned it first. Does it go back to what you said earlier?
Enrico: You would have defenses. I mean, that is definitely . . . there's lots of Micro everythings that are not Microsoft.
Jeff: Right.
Enrico: So, that portion of the word is in and of itself not trademark infringement. The fact that it became MicroSun, the analysis would be this. When was it publicly available for consumption that Microsoft and Sun were coming together? So, the whole thing would be proven on your intent. And where these particular types of cases which, again, happen all the time usually come down to is when was the announcement made, or when did someone publish the suggestion that this might happen? And if you registered after that suggestion, you will have some defenses, but they could still come after you and theoretically they could win.
I mean, 98 percent of all this stuff is in the gray area where lawyers pay for their big, fancy cars, right, because they just argue with each other forever, and there's no direct right answer. There's just things that could go either way and that could be argued about.
But typically the analysis comes down to when did it become known that this might happen, and if you registered after that, someone is going to assume your intent was to guess. Now, your defenses would be but there were no trademark rights at that time. And that would be a decent defense, and you could actually win on that.
Jeff: Right.
Enrico: So, you're a bit more of a speculator in that instance than a cybersquatter. Your practical problem is if they decide to come after you, how much money are you going to devote to the fight?
Jeff: Two last questions. How can I make sure my domain portfolio or domains, when I pass, go to my loved ones?
Enrico: Well, they're like any other asset, typically, and this is an emerging area of law. Typically, they are going to pass down to your heirs. What I would say is you better make sure someone's got the log-in information, because as far as the registrar's concerned, they don't care who the hell you are. If you don't have the log-in information, you cannot control the domain, and it eventually will expire.
So, the first tip I would give you is make sure that you put it in an envelope, somewhere where your spouse can get it, all the log-in information. The second thing would be to draft as part of your will the fact that that asset is passing to your spouse so it's absolutely clear.
The third thing would be to put an interim agreement in place that until the court actually says that the asset has changed, authorizing as an agent your spouse to control and manage those domains as the registrant so that during the period between your death and ultimately the court making sure the assets get passed, that there's no problem with your spouse controlling those domains.
Jeff: Understood. Finally, you had a lot of great tips, a lot of great advice. But what would be your best advice going forward for domainers, brand owners, and developers when it comes to, as we said earlier, ignorance of the law is no excuse? What's your best advice going forward to these folks as far as protecting their assets as it were?
Enrico: I would say it's definitely understand your biggest risk is trademark issues, and there are no words left in the world right where you've got trademark availability and a domain name available. So there's this huge traffic jam on the Internet of trademarks and domain names. It is your biggest risk. The days of just sitting around and griping about various UDRP decisions are over. Be a smart brand owner. Protect yourself under trademark law. Be a smart domainer. Understand trademark law and apply that understanding to your portfolio. Lots of bulletin boards out there where you can get free legal advice and tips. Lots of websites. TraverseLegal.com, our website has as much or more information about these issues as anywhere. So you can find it. You can self-learn to the point where you need counsel, and then typically an attorney will help you out for free to a point anyway. So be a smart businessperson. Understand your market. Understand what's going on and your biggest risk -- trademarks.
Jeff: Perfect. Well, that's about it. Everybody, I appreciate everyone logging in and checking this out. I think you, Enrico, for participating today in the Gratitude session. This has been really wonderful. We appreciate your coming out today.
Contact Enrico http://www.traverselegal.com/
To catch up....
Part One
Part Two
Enrico: And so, there's no down side to it from a defense standpoint. It's not going to hurt you any more than you're already hurt by holding them. So, I would say it's a good idea. I will tell you that a lot of domainers simply register domains in really what is false registering information because if the domain is ProfitableBusiness.com, they'll list the registrant as profitable business. That's not going to get you very far in terms of insulating yourself from liability, number one. Number two, it kind of smells like bad faith. And number three, we're seeing an awful lot of activity on accurate "who is" information. So, one of the elements of bad faith is inaccurate. If you are going to hold your portfolio, you should do so as an LLC with this caveat. Remember, we talked about how every time there's a new registrant, it starts the clock again. This is one of the challenges that you face in dealing with this, should I change the registrant information to a LLC. It's going to appear publicly as though the domain was transferred.
Now, you can come in and defend under the UDRP and say, "I'm the same person," but you're already at the arbitration at that point. So, you just have a little bit of risk that someone's monitoring a domain that you had before they had a trademark, and now they see a change in the registrant. So now they figure they can go and bring an UDRP.
Jeff: Okay. We have some more questions out there. We'll get to them momentarily. Do me a favor, people. If you're watching, I have a lot of questions that have been asked, but if you want to ask it in person, I can pull you off mute. Please click the little "raise your hand" icon up there for raised hand. Otherwise, I'll just read your questions. Sometimes, you can be a little shy, and I don't want to put anyone on the spot.
So, what about redirects? I guess we got into a little bit of that. Now, is there's any more to expound on redirects and whether they can put a domain or, in this case, an entire portfolio in jeopardy?
Enrico: Well, let me talk a little bit more, Jeff, about how some of the other redirects that obviously domainers see out there on both sides. Obviously, it's a big issue, because what typically will happen to a redirect is someone will have in their portfolio a bunch of domains, but they're really trying to focus on one particular domain. So, they'll just have everything redirect to the that domain which will be parked. Redirects, really they don't pass the smell test oftentimes. Obviously, if you're going to redirect to the competitor of the trademark holder, we all know how that's going to work out. But, if you're redirecting to something completely unrelated to anything having to do with the trademark holder . . .
So, let's say that you've got Apples.com and instead of parking that page, you're redirecting that to a parked page which is showing a bunch of everything. But for whatever reason, the software is not kicking out computer ads, it's kicking out all kinds of different stuff on business cards or what have you. So, you don't have the problem of appearing to be competitive with the trademark holder. So, that's good. Where you take a step backward is on the issue of whether or not you have a legitimate interest in the domain, a legitimate business interest in the domain. If you're redirecting, it doesn't appear that you're using that domain for anything. It's tough to make the argument that I've got this domain and my legitimate business interest to redirect to another domain. So, it's a small step backwards but one nonetheless.
The other thing is if that Apples.com traffic is going to a parked page, then that parked page the software is eventually going to start spitting out a bunch of computer ads. So, you kind of lost control. If, however, you are redirecting into an affiliate program where it's going to a client's particular page, again you're safer than if you are parking with competitive ads, but you're not completely out of the woods because you've got this legitimate business interest.
Jeff: Okay. A couple more questions out there. We have, bear with me one second, we have someone who had a question, and I want to go back up there. David Webb, let's put that out to David Webb. I believe you had a question. Are you there, David? David, are you there? Okay, maybe not. We're going to throw that one back on mute.
Let me ask another question from our list of questions. Let's change gears just a little bit. If we have more questions in this area if, we can come back to it. RSS feeds, a lot of people like to feed content to a site, making it a little bit more sticky, a little bit more traffic to create some awareness. What about copyright and RSS feeds? How is that? How should we be handling that?
Enrico: Well, RSS are fairly safe, typically. Copyright law is trying to keep up with all this technology. People say, what is Internet law? Well, we do have some special statutes in the UDRP and the ACPA which were designed specifically for the Internet. But by and large Internet law is trying to take all these traditional principles of, for instance, contracts, terms of use. How is that enforced in cyberspace? People are never sitting across the table from each other over a contract. How does copyright law work with all these new technologies which distribute what would otherwise be copyright protected information?
But RSS feeds are fairly safe in that copyright violations look at a whole range of factors in order to determine whether or not your use of the copyright content is fair use. So, just because something is copyright protected doesn't mean you can't use it. The First Amendment protects a lot of space around copyright. So, I could take anything from CNN, a quote from a CNN article and say, "This is bull. I disagree with this." That's called fair commentary. That's fair use. How much of the total work you are using of the copyright protected work is one of the factors. Well, an RSS feed, you're typically pulling the title and a hyperlink.
So, that's a really good defense to a copyright claim on a RSS feed because if it's a long article, great. Now, some of you have probably heard that the AP actually took issue with people pulling its AP feeds into their sites and eventually backed off somewhat from that. So, RSS feeds, like everything else, there's always room to argue here. The factors will be how much of the content are you using. Is it fair use?
Now, the factors against you are that you're providing no commentary around that content. And if your whole site is RSS feeds and you're just simply pulling in other people's content and there's nothing more going on in that site, you're going to have a very weak fair use defense. If there's nothing else going on in that site except PPC ads, you're a little better off, but you still have some risk.
As a practical matter, what I would tell you is if someone complains about you pulling in their feeds, pull it down because you could get a DMCA, a Digital Millennium Copyright, notice to your host, to your parking company that says, "I'm the copyright holder of this content," and all of a sudden your site is turned off. So that's the risk. And this feeds very well into some of the things that we're about to talk about, which is development.
None of us are surprised that the world does not think that parked pages are legitimate content. The bias against parked pages has been there for a long time and probably isn't going anywhere any time soon. It's great that Google, at least, got one foot in the water and is allowing ads to be displayed there. It's great that all these parking companies are developing great software around that, but the more developed your domain is from a judge's perspective or a layman's perspective, the more legitimate you are. So, a site that is designed only to pull in RSS feeds, other people's content and is pulling in the title, the hyperlink, and the entire article, you are copyright infringing. And if someone's registered that copyright with the copyright office, it's $150,000 in penalty damages plus attorneys' fees.
Jeff: Right.
Enrico: And so those scraping sites, bad idea. RSS feeds, title, hyperlink, you're probably going to be fined, and if someone complains, just simply go in a different direction.
Jeff: Talk to me a little bit about developing domains. There's a lot of talk about that. What do you see going on out there in that space?
Enrico: Well, there sure is. In the last 18 months, the conferences have all been involved about what? One thing, development. It's really interesting in my business because we represent the main interest. We represent the trademark interest. We have a very healthy, broad perspective on what's going on in the Internet space, but we also represent some of the most high traffic websites in the world, websites doing a billion downloads every couple of months, sites doing three to five million hits a day. And a lot of startup companies that end up doing very well, thank you, as a result of, not their domain name. Maybe the domain name is a significant piece of what they're doing, but content is where they are making money.
So, a little anecdotal story. We represented a guy out in California, a young guy, 22 or 23 years old. He ran a site called Bankaholic.com, and many of you may have read the articles about a year or so ago. We did all of his trademark work and protected all the imitators on the Bankaholic name. But, at some point, he did a deal with BankRate.com where they started displaying ads on his site. Well, he ultimately cashed out in a $15 million deal for Bankaholic.com, which is a blog custom designed with all kinds of bank rate and interest rate information. So, to us it's always strange that domainers can't seem to get their brains around development as being anything more than a more sophisticated parked page.
We understand all the arguments that, "Oh, I've got too many domains," and yada, yada, yada, and "I can't do it, and it's going to cost me $10,000." Look it, people. I understand domain names are worth money. It can be worth money, but there is as much or more money being made by people who actually spend time and money developing domains. You don't have to develop all your domains. And yes, you either have to have the skill set to develop, or you're going to have to pay someone to do it. But people are making a lot of money by developing.
So, we believe in content. We think that the future of the Internet is A+ content. If you manage to get that and develop a model on WordPress or even a Digg model, ClickSite or custom develop an eCommerce portal for affiliates, there's people that are making an awful lot of money out there. And if you're not doing it, you should learn how to do it.
If you make some money, you don't need a hundred time return on your investment or a ten time return on your investment. Reinvest some of that money in your best domains on A+ content. That is the future. The sooner domainers realize that, the better because there's no one in the industry more perfectly positioned to actually monetize that on a broader level across many domain names on a commoditized process basis than domainers.
And in all of the conferences that have been going on, of all the speakers that have spoke about development, I always come away from these conferences shaking my head and say, "Okay. How do I develop?" You develop with either a great application, great eCommerce, or great content, and over time those are going to be worth an awful lot of money.
We have affiliate clients who are doing $100,000 a month in affiliate revenue on marginal domain names, good but marginal domain names. So, there's money to be made out there outside the domain name itself.
Jeff: What about parking? What about particular issues with regard to parking?
Enrico: Well, you know, parking is a risk. It's an easy way, and you don't have to do much of anything to park a page and to try and tweak it a little bit and, hopefully, it makes some money. But you've got to understand that is typically exhibit A on any ACPA or UDRP complaint. It's the parked page selling competitive ads. So, again, pull your best domains out of the parking portfolio if you're concerned about them. Do a trademark assessment or pay an attorney to do a trademark assessment of your highest value domains, so you can make intelligent business decisions based on real information and risk about those domains. It doesn't do you any good to bitch about trademark law. It's going nowhere. It's not going to change, except for, maybe, the worse for you.
So, smart domainers are trying to actually figure out how to make money off of trademarks. So, for instance, our Bankaholic client found a way to actually turn that into a valuable registered trademark protected asset. By the way, you don't have to have your trademark registered with the USPTO or anywhere else in order to have trademark rights. So just because it's not registered doesn't mean they don't have trademark rights. Common law trademark rights exist the moment you start doing business and commerce as a brand. It's a little bit weaker. Look, if it's a mom and pop shop that no one would know existed and it happens to be a two-word generic, they're going to have a hard time showing much, if any, common law trademark rights, unless you attack them directly and show you know they exist. Use trademarks as a value added.
Your best domains, if they're two-word descriptive, chances are you can turn them into something suggestive in terms of what you're offering on that site and get the trademark registered for $1,100, if you use an attorney. And boom, you've just turned your domain into a trademark asset.
Jeff: Interesting. Let's switch gears a little bit here and talk about private transactions. For example, if I sell a high value domain in a private transaction, what type of contract should I be putting together for something like that?
Enrico: Well, if you are actually selling the domain, the things you need to be thinking about are this. The funny part is most of this stuff isn't in the Sedo type transaction system. You don't want to be warranting that you have trademark rights on the domain, okay? You want to put all of the risk on the buyer that three months from now someone is going to come in and say, "That's my trademark."
And it happens all the time. We see it all the time. Someone buys a domain. They pay a lot of money, $80,000, $150,000 for a domain, and then all of a sudden it turns out that there's trademark rights on a two-word descriptive, and someone wants to take it for no compensation. So, if you're the seller you want to say, you want no warranties about the domain beyond the fact that you are the proper registrant of the domain. You haven't stolen it from someone.
If you are the buyer, you have two options. One, you want to try and get the seller to warrant it, or you need to do significant due diligence. Work with an attorney to make sure that if there are trademark rights on the domain, that the domain hasn't been used in an infringing way, to understand what class of goods and services the trademark deals with so that you're not going to step into that area with your use, and go in with your eyes open. Most people are going to disclaim the fact that they know what trademarks are out there, and so you're going to have to do your due diligence. So certainly protect yourself on the trademark side. If there's content on the site, you want to get, as a buyer, a warranty that they have rights to the content. If it appears to be original content, that's great. We all know how that goes. It's real easy to scrape someone else. So, if it's more than just RSS feeds getting pulled in, you better get a warranty that that is original content.
You certainly want to do a complete domain history. Domain Tools is, from my point of view, the best tool to use in order to research the history of a domain. Get an account at DomainTools.com, and they'll show you archived information. It doesn't show up in Archive.org a lot of times. They'll show you a complete "who is" history. You can even purchase the entire portfolio of the seller. If it turns out the seller's got questionable domains in there or has high turnover or whatever, then that's a potential problem.
Check the bulletin boards to find out whether there have been any complaints on the seller's name, the seller's email address, anything else you can find out about the seller. You don't want to be buying a stolen domain. We get cases all the time where we get people who are either trying to have us defend them because someone's trying to take their domain, and it turns out that the allegation is that it was actually stolen. As the attorney, it's very hard to unwind that and figure out who's telling the truth. But you certainly don't want to be the person buying what turns out to be a stolen domain.
The other things that we're seeing out there are lease or lease-to-own transactions. So, especially if you're good at developing the domain, you could actually lease the domain to someone and give them a right of first refusal on buying it at some point in time after they can taste the revenue that they might get off the domain.
Also, seller financing. So, if there's a domain out there for a million, two million bucks, a couple hundred thousand bucks that you want to buy and you've got a plan to monetize it, find some money for a down stroke and then essentially lease the domain and get an option to buy it at a strike price down the line. And then, use the revenue above and beyond your initial down stroke to actually pay for that domain over time. It works really well for an affiliate-type play where you know and you have high confidence because you've done the analytics to know that you're going to be able to do $100,000 a month in revenue. Paying a couple million bucks for a domain over a couple of years makes perfect business sense, and if you could put down a hundred thousand dollars and then get either a monthly payment or a right of first refusal, you'll be able to self-finance out of profits to purchase that domain.
Jeff: We had a question that went to the contract side, and I'm going to open it up. I think I had the name wrong before. It's Steven Webb. If you're out there and you care to ask your question about a Sedo sale that crosses borders. Steven, are you there? Okay, maybe not.
Here's what we're going to do. I'm going to go ahead and ask that question. Actually, it wasn't a sale. But if I win a domain at Sedo and the seller doesn't complete the sale, can I sue the seller for the domain in court in my country, i.e., Canada?
Enrico: Probably not. It happens all the time. Sedo sales, my big beef with Sedo is the fact that the sellers oftentimes are just testing the market. They're not serious, and when you put in that bid that matches what they were asking and assume that you've actually purchased the domain, if you look at the Sedo contract, you'll note that there's wiggle room on the back end for the seller to get out of the transaction. So, we've had lots of these situations come down the pipe. We've sent letters to Sedo trying to get them to actually force the transaction etc. They won't do it. Obviously, there are different Sedo models for buying and selling, and some of them are tighter than others.
But the first part of your question is really can you force the sale of that transaction? I will tell you it's very difficult. If it was a very high value domain, it might be worth it to take it to court and then, of course, the question becomes where. There's no completely definitive answer to that except to say that jurisdiction and venue are things that people fight about all the time in court. And so, if you go to where the seller is located, you're removing that venue and jurisdiction issue as an issue. So, if you just look to get at the merits of the thing, find an attorney who can bring suit where the seller is located. If you want to go somewhere else, if you want to take a look at the Sedo contract and see what that says about venue, if you want to go to the location of Sedo, those things might be fine. But it might also be fought about.
The chance of you actually pulling them into your jurisdiction, if they've never done anything there, is not likely. You probably cannot pull them into where you are located, unless there's what is called minimum contact, some sort of systematic and continuous presence in that state, something beyond your transaction.
Jeff: Another question. What should you say when someone calls to buy a domain name so that you don't get into issues or a UDRP challenge later? So, what should you say upfront so that you don't face a challenge down the road?
Enrico: Great question. And it's a very touchy, feely thing, and there's nothing that is going to be absolute. But what you want to say is essentially . . . let me just back up.
Under the UDRP, if you approach a trademark holder, you're toast. If a trademark holder approaches you, now you've got defenses. What you want to say is anything that's going to suggest that the domain really isn't for sale, but if they want to make an offer, go ahead and you'll run it by your partners. The key message being, I'm not trying to sell you this domain.
If you say something like, "Hey, that's great. We were really hoping you would contact us," which unfortunately I see all the time, you've just told the UDRP arbitration panel that, in fact, you knew they existed and, therefore, you knew their trademarks existed.
A lot of folks come to us and have us handle that. If you do it through counsel, it's even better protected as long as they know what they're doing and they don't use the wrong words. Again, the gist is you're not really looking to sell the domain, but if they want to go ahead and make an offer, you'll pass it on.
Jeff: Gotcha. Now, let's go back and try this one more time. If he's available, Steven Barkley, are you there? I think we caught somebody on the horn there. I was going to put it out there.
Let me ask another question. Bear with me. Someone said, "Should I get rid of the Olympics.tv?"
Enrico: You know, the answer to that is probably yes. It's trademark protected. There's actually special laws that were passed to protect the Olympics, if you can believe it. You certainly shouldn't monetize it in any way having to do with the Olympics at all.
Now, let me back up and say that there is an area where you can legitimately use someone else's trademark potentially. It's an emerging area of law. We've all heard the word "gripe" site, right? Well, there are also fan sites. There are sites where there's no monetization. There's no ads on the site. You're not trying to sell the domain. It doesn't say for sale. In those instances, you would have defenses of, basically, non-commercial use. So, you're not trying to financially benefit. But it's still a risky area, because look it, who wants to go to court? Who wants to pay an attorney tens or thousands of dollars or more to find out if you're right?
So, that kind of thing, there are probably some non-infringing uses out there in terms of fan or gripe. Although they're not perfect, the best gripe sites use the word "sucks" so that it's clear to any consumer that you're a gripe site. But if you made it clear that it's a gripe site or a fan site and you weren't monetizing it, you're, at least, going to have some defenses, which would allow you to just turn it over if anyone complained.
I'm sure there are companies and businesses out there called the Olympic, and so you could choose to develop it in a non-infringing way. There could be a skating rink called the Olympic. There could be different things that you could use it, but you'd have to develop the domain so that it was not non-infringing. So, those would be the options.
Jeff: A couple last questions. We're coming up on the hour. So, it's been a great hour invested here. When a company submits its products to Amazon, eBay, etc., are they condoning advertising of that product everywhere, including companies that signed on to sell products on that system, Amazon, eBay, etc.?
Enrico: No. And so, when you sell a product on Amazon, you as the trademark holder, of course, retain all your trademark rights, you retain all your copyrights to the images, etc. and text of descriptions of the product. So, if I understand your question correctly, it really becomes, can I now resell that product or try and sell that product? There's a lot of affiliate marketers who might try and get in on that game. Those affiliate agreements are typically extremely limiting in terms of trademark use and copyright use and authorized channels and the rest.
So, all of those rights are protected, and we have a lot of work where product owners are actually retaining us to remove infringing materials from eBay or materials that are listed at eBay from being sold by someone else, an unauthorized person under the trademarks brand somewhere else.
Jeff: Okay. Another question. What is your thought on Allpspgames.com?
Enrico: One more time on that one, Jeff.
Jeff: All PSP, PSP, I presume being the hand held games.
Enrico: Again, you're in a tough position. Assuming PSP meant Play Somewhere Playful, you're using as a tourist site, you always have that non-infringing development possibility, which maybe PlayStation would come in later and say, "Hey, we want to buy that domain off of that one." It wouldn't be a likely candidate for that. But if you're using it anywhere in the gaming sense, you've got a problem. If you're monetizing it with anything having to do with gaming, you've got a problem. Those are the types of companies that are monitoring the web and are trying to keep track of what's going on.
If you're lucky, they'll just send you a threat letter and you'll turn over the domain, and you'll be done. By the way, if you get one of those threat letters on one of your domains, just because you turned over the domain doesn't mean they can't come back and sue you. It's best to get what's called a release of liability, which says if I turn over my domain, you agree to release me from any and all liability for having registered the domain. Most companies, in exchange for getting it, are willing to enter into a release.
If they're not, you take some risk that they're going to get the domain from you, then come and sue you, which is what happened in our Navigation Catalyst, and we went out and got all the domains. I'm sure they thought it was over, and then we stepped into court under the ACPA and statutory damages, and they've got a big problem.
Jeff: If a parking company feeds trademarked products to your domain name, are they responsible for trademark issues should they arise?
Enrico: No, because those parking companies are typically displaying Google ads. And so, when the trademark holder puts their advertisement with their keyword triggers and their header text and their descriptive text into Google, they are implicitly authorizing that to be displayed throughout the network.
And it's a good question because it raises this issue. There is this kind of implied rights argument that comes up oftentimes, where if you put your trademarks and copyrights into a particular distribution channel, you implicitly allow everyone who's displaying that to do so. So, not a problem. Google's got that covered. It's part of their agreement with the AdWords advertisers as well. So, you're good to go, and they can always opt-out of the parked page model anyway as an advertiser.
Jeff: You spoke earlier about sale of domains and whether starting over versus the trademark on a name that's somebody else has a domain, too. Prefacing that that way, how about if you bought as an individual and then you later . . . let me read this again. How about if you bought as an individual and then you later, I guess, bought from a corporation, does the clock start again? I guess they're asking, does it matter who the seller or buyer is in a domain that . . .
Enrico: Yes.
Jeff: Yes. Go ahead.
Enrico: Yes, it does. I mean, look it. If you get dragged into the UDRP because there's been . . . let's say, in 2005, someone registers for a trademark. You had the domain in 2004. So you're out of harm's way, at least, under the UDRP.
If in 2009, there's a change in the registrant information and the trademark holder comes after the new registrant, if the new registrant is the same or related party to the first registrant, then you can make the argument that the initial registration date is the date by which we're measuring the merits. And as of the original registration date, there were no trademark rights.
So, you'd have to show that there was a relationship. Absent that relationship, you're going to be starting the clock again, and in 2009, it could be well after the trademark was registered in 2005, and you're going to have a problem.
Jeff: Similar question. This might be the same. And then, we're going to wrap it up. What if it's two companies, sounds like an SAT question again, two questions.. What if it's two companies that merged together and you bought the name before they merged together, but the domain includes both company names? Interesting caveat that I guess it's not related to that one. This is related to if you owned a trademark that then, I guess, got . . .
Enrico: It happens all the time.
Jeff: Okay.
Enrico: Mergers. It's an interesting question, because there are a lot of domainers out there who actually are trying to anticipate the markets, and in today's economy with everything going up in flames, there's a lot of mergers and acquisitions going on.
And so, the answer is, if there are two strong trademarks, it doesn't matter if you add any word to the end of it, if it incorporates, in part, their trademark, you've got a problem. So, let's say, you've got a domain name that's Merrill Lynch whatever, and then there's another company by the name of Equity Group. So, if you sensed that they were going to get bought and you had MerrillLynchEquityGroup.com, the fact that Merrill Lynch is in there, you're toast. If the other company also has strong trademark rights, too, you're double toast, but as long as those trademark rights stay intact.
So, there's a whole other portion of this law. Typically, they do, but as goods and services are, you can abandon your trademark. So if someone's no longer using the mark to sell goods and services and they intend to abandon those marks as to those goods and services, even if it's registered, there are no trademark rights. But then you're left to go challenge that trademark, either at the USPTO, at the Trademark Trial & Appeal Board, or in court.
Jeff: What if they're not? Let's say, that Microsoft and Sun Microsystems . . . not a what if here, but just humor me. Microsoft and Sun Microsystems decide to merge, and you heard it coming. You had whatever information. So, you created MicroSun and neither of which is . . . Sun is not and Micro is not trademarkable, so to speak. But you had that kind where both are generic, but together they create what becomes later a trademarked name, but you owned it first. Does it go back to what you said earlier?
Enrico: You would have defenses. I mean, that is definitely . . . there's lots of Micro everythings that are not Microsoft.
Jeff: Right.
Enrico: So, that portion of the word is in and of itself not trademark infringement. The fact that it became MicroSun, the analysis would be this. When was it publicly available for consumption that Microsoft and Sun were coming together? So, the whole thing would be proven on your intent. And where these particular types of cases which, again, happen all the time usually come down to is when was the announcement made, or when did someone publish the suggestion that this might happen? And if you registered after that suggestion, you will have some defenses, but they could still come after you and theoretically they could win.
I mean, 98 percent of all this stuff is in the gray area where lawyers pay for their big, fancy cars, right, because they just argue with each other forever, and there's no direct right answer. There's just things that could go either way and that could be argued about.
But typically the analysis comes down to when did it become known that this might happen, and if you registered after that, someone is going to assume your intent was to guess. Now, your defenses would be but there were no trademark rights at that time. And that would be a decent defense, and you could actually win on that.
Jeff: Right.
Enrico: So, you're a bit more of a speculator in that instance than a cybersquatter. Your practical problem is if they decide to come after you, how much money are you going to devote to the fight?
Jeff: Two last questions. How can I make sure my domain portfolio or domains, when I pass, go to my loved ones?
Enrico: Well, they're like any other asset, typically, and this is an emerging area of law. Typically, they are going to pass down to your heirs. What I would say is you better make sure someone's got the log-in information, because as far as the registrar's concerned, they don't care who the hell you are. If you don't have the log-in information, you cannot control the domain, and it eventually will expire.
So, the first tip I would give you is make sure that you put it in an envelope, somewhere where your spouse can get it, all the log-in information. The second thing would be to draft as part of your will the fact that that asset is passing to your spouse so it's absolutely clear.
The third thing would be to put an interim agreement in place that until the court actually says that the asset has changed, authorizing as an agent your spouse to control and manage those domains as the registrant so that during the period between your death and ultimately the court making sure the assets get passed, that there's no problem with your spouse controlling those domains.
Jeff: Understood. Finally, you had a lot of great tips, a lot of great advice. But what would be your best advice going forward for domainers, brand owners, and developers when it comes to, as we said earlier, ignorance of the law is no excuse? What's your best advice going forward to these folks as far as protecting their assets as it were?
Enrico: I would say it's definitely understand your biggest risk is trademark issues, and there are no words left in the world right where you've got trademark availability and a domain name available. So there's this huge traffic jam on the Internet of trademarks and domain names. It is your biggest risk. The days of just sitting around and griping about various UDRP decisions are over. Be a smart brand owner. Protect yourself under trademark law. Be a smart domainer. Understand trademark law and apply that understanding to your portfolio. Lots of bulletin boards out there where you can get free legal advice and tips. Lots of websites. TraverseLegal.com, our website has as much or more information about these issues as anywhere. So you can find it. You can self-learn to the point where you need counsel, and then typically an attorney will help you out for free to a point anyway. So be a smart businessperson. Understand your market. Understand what's going on and your biggest risk -- trademarks.
Jeff: Perfect. Well, that's about it. Everybody, I appreciate everyone logging in and checking this out. I think you, Enrico, for participating today in the Gratitude session. This has been really wonderful. We appreciate your coming out today.
Contact Enrico http://www.traverselegal.com/
Photo: Enrico Schaefer courtesy of Facebook
3 comments:
Wow great information about internet law. You can talk to an internet attorney for futher information too. Thank you for sharing this information.
Thank you for the information you've provided. However, at the beginning of the article 'Part One' and 'Part Two' seem to redirect to the same page. Can you possibly provide the correct links for the first two parts? Thanks in advance.
anne- email me at the contact button above and I will reply with a word document transcript of full interview
Post a Comment