Internet and Copyright Law

WHAT IS A COPYRIGHT?

WHAT IS A COPYRIGHT LICENSE?

WHAT IS A “WORK FOR HIRE” AGREEMENT?

CAN MY DOMAIN NAME BE TRADEMARKED?

I HAVE A DOMAIN NAME DISPUTE. WHAT CAN I DO?

I’M A WEB DESIGNER. DO I HAVE ANY LEGAL OWNERSHIP IN MY
DESIGNS THAT I CREATE FOR MY CLIENTS?

HOW CAN I MAINTAIN FULL OWNERSHIP OF MY WEB SITE?

WHAT IF SOMEONE IS USING METATAGS WITH MY COMPANY’S NAME IN IT
TO PROMOTE ITS BUSINESS?

HOW CAN I SHARE MY MILLION DOLLAR IDEA WITH INVESTORS WITHOUT
THEM STEALING IT?

WHAT IS A COPYRIGHT? A copyright is the way one legally protects expression to the authors of “original works of authorship”, which include literary, dramatic, music, artistic, and certain other works. A copyright attaches to a work when it becomes “fixed” in a tangible medium, which can be paper, magnetic tape or silicon and the fixation must be “sufficiently permanent or stable to permit it to be perceived, reproduced, or otherwise communicated for a period of more than a transitory duration.” 17 U.S.C. Section 101.

WHAT IS A COPYRIGHT LICENSE? A copyright license, in the context of internet law, is an agreement in which you allow internet users to freely copy or distribute your copyrighted documents, lists, or images, as long as certain information is kept intact, such as your copyright notices and contact information. A valid license can be drafted which may allow unlimited copying by others so long as

a) your copyright notice is intact;

b) copying is done solely for personal use, without commercial gain, and that others may not resell your content;

c) you are notified of any deviation from the license.

WHAT IS A “WORK FOR HIRE” AGREEMENT? A work for hire agreement is an contract whereby someone such as a Web site designer prepares a work that is defined in copyright law as follows:

a) a work prepared by an employee within the scope of his or her employment;

b) a work specially ordered or commissioned for use as a contribution to a collective work, as a part of a motion picture or other audiovisual work, as a translation, as a supplementary work, as a compilation, as an instructional text, as a test, as answer material for a test, or as an atlas, if the parties expressly agree in a written instrument signed by them that the work shall be considered a work made for hire...

The agreement must be written and to be valid it should specifically state that it is a work for hire agreement. The agreement must be signed by parties to it. The work must have been “specially ordered or commissioned” and the agreement cannot be made after the person hired has actually done the work, it must be made prior to the creation of the work. Note however that there is conflicting case law as to whether the actual writing memorializing the agreement must have been executed before the creation of the work; compare Playboy v. Dumas, 53 F.3rd 549 (2d. Cir. 1995) and Schiller & Schmidt, Inc. v. Nordisco Corp., 969 F.2d 410 (7th Cir. 1992).

CAN MY DOMAIN NAME BE TRADEMARKED? In certain cases, the answer is yes, if your use of the domain name is not simply as an address but is actually used to identify the goods or services of the person or firm claiming the mark which goods or services are provided by the internet. You should use that domain name in your advertising and marketing, so that your domain name identifies your goods or services. As with any contemplated trademark, it is registerable to the extent that it is distinct. If your domain name meets the criteria for a registered trademark, it should be registered by the U.S. Patent and Trademark Office. Trademarks can also appear in portions of the URL other than the domain name, such as a subdirectory name or a specific file name. For example, this could occur hypothetically if we used darrensmithlaw.com/starbucks/blockbuser.html.

In one District Court case in California, Patmont Motor Werks, Inc. v. Gateway Marine, Inc., c-96-2703 (N.D.Cal. 1997) it was found that as long as the content of the page does not lead to confusion about the source, then there is no violation when a server uses a trademark as a descriptive indicator. In Patmont, the court ruled that the use of the trademark in the URL constituted “nominative fair use.” However, the law is still unsettled on this issue and you should seek the advice of a skilled internet attorney before attempting use the trademark of another in your URL. Note that trademark violations can occur if others are using your trademark in their domain name.

I HAVE A DOMAIN NAME DISPUTE, WHAT CAN I DO? If you are having dispute about a domain name, there are two courses you can most likely take to resolve it. First, Network Solutions, Inc. (NSI), in cooperation with the World Intellectual Property Association has adopted a new dispute policy, effective January 1, 2000, that uses the Uniform Domain Dispute Resolution Policy (UDRP). Second, you can rely upon the remedies of the federal Anticybersquatting Consumer Protection Act (ACPA), enacted November 29, 1999.

Both UDRP and ACPA allow for remedies but only in the event that you have a registered trademark. Under either the UDRP or the ACPA, the violator’s use of your domain name must be identical or confusingly similar to that of your registered trademark, and that use must be in bad faith. What constitutes bad faith must be decided on a case-by-case basis, but here are some factors to consider:

a) a domain name owner has obtained a domain name primarily for the purposes of selling, renting or otherwise transferring it to a party who owns a registered trademark or to a competitor of the trademark owner;

b) someone has registered a domain name in order to prevent the owner of a registered trademark from using that trademark in its domain name;

c) adopting a domain name primarily for the purpose of disrupting a business of a competitor, and/or diverting consumers from the mark owner’s online location;

d) the domain name registrant provides misleading information when applying for the registration of the domain name.

Under the ACPA, you can file a civil action under The Lanham Act (the Federal trademark law) seeking an injunction, damages (both actual and statutory), attorneys fees and profits that were obtained by the violator from using your registered trademark name. Statutory damages are allowed of up to $100,000 per domain name.

For example, in a recent case decided under the ACPA, Sporty’s Farm LLC v. Sportsman’s Market, Inc., Docket Nos. 98-4252(L), 98-5738 (XAP) (2d Cir. Feb. 2, 2000), a Second Circuit federal court enjoined a party from using as its domain name the federally registered trademark “Sporty’s” even though that party had registered its domain name with NSI. The court directed the party to not only stop using the domain name but ordered it to be transferred to the owner of the trademark.

On the other hand, under the UDRP, there is an administrative panel set up by the Internet Corporation for Assigned Names and Numbers (ICANN) to determine your rights. This administrative panel can cancel or transfer the domain name to you if the panel determines that it infringes upon your trademark and that the domain name was registered in bad faith.

As of January 1, 2000, NSI, (as well as AOL and Name it) will no longer put a domain name on hold pending your resolution, but it will either cancel, transfer or otherwise change a domain name after it receives:

a) a written authorization from the domain name owner;

b) an order from a court with proper jurisdiction or arbitration requiring such changes;

c) a decision by the ICANN panel requiring these changes.

Under the UDRP, a complainant must describe the grounds on which the complaint is made, including:

a) the manner in which the domain name(s) is/are identical or confusingly similar to a trademark or services mark in which the complainant has rights;

b) why the Respondent [domain name holder] should be considered as having no rights or legitimate interests in respect of the domain name(s) that is/are that subject of the complaint;

c) why the domain name(s) should be considered as having been registered in “bad faith.”

Unlike previous policies, you no longer have to have a trademark registration that is identical to an infringing domain name; now the policy can be used against infringers who merely adopt confusingly similar variations of a trademark in a domain name.

A skilled internet attorney can advise you of the pros and cons of using the Anticybersquatting Consumer Protection Act vs. using the Uniform Domain Dispute Resolution Policy. If you need legal assistance in resolving your domain name dispute call our offices at (714) 505-2700 or e-mail us at smithlaw@darrensmithlaw.com.

I’M A WEB SITE DESIGNER. DO I HAVE ANY LEGAL OWNERSHIP IN MY DESIGNS THAT I CREATE FOR MY CLIENTS? Under certain conditions you may hold a copyright ownership in a Web site that you created for others. Copyright ownership of a Web site usually can be separated into two aspects: copyright of a design (e.g. hyperlinks, jpegs, gifs) and the copyright of the content (e.g. the text). Sometimes you, the web designer, may have jointly made decisions with the Web site owner and worked hand-in-hand with him or her in such a way that the work may be considered to be a “joint work” for copyright purposes. A joint work, as defined by the copyright law is a work prepared by two or more authors with the intention that their contributions be merged into inseparable or interdependent parts of a unitary whole (17 U.S.C Section 101). However, if your contributions to the site are distinguishable from the other aspects of the site, then you may hold a separate copyright in that contribution. The HTML code and metatags may in certain cases be owned by you. Note however that if you downloaded jpegs and gifs used in the design, those downloads may be subject to another's copyright or may be in the public domain and you therefore cannot claim an ownership interest in them.

On the other hand, even if your contribution to the site could be considered separate, you still may not hold a copyright ownership in the Web site you created if you were an employee of the owner of the Web site or if you signed a work for hire agreement before designing the site. If you were an employee when you designed the Web site, everything you create during the scope of your employment will usually belong to your employer, unless the copyright was assigned to you. Also, if you acted as an independent contractor and signed a valid work for hire agreement, then you may not claim copyright ownership in your design.

If you were not an employee or you did not sign a valid work for hire agreement, then the Web site owner may only hold a non-exclusive license to use your material. To negotiate a license, or to find out more about your legal rights as a Web designer call our office at (714) 505-2700 or e-mail us at smithlaw@darrensmithlaw.com.

HOW CAN I MAKE SURE THAT I MAINTAIN FULL LEGAL OWNERSHIP OF MY WEB SITE? Here are some of the legal issues surrounding your Web site to consider when you are meeting with a skilled internet attorney. First, you should determine who owns the copyrights contained in your Web site. Note that the free speech rights guaranteed in the First Amendment do not shield copyright infringement. Universal City Studios, Inc., et al v. Shawn Reimerdes, et al, 2000 Civ. 0277 (LAK) (S.D.N.Y., Feb. 2, 2000). Also, you will need to determine whether any trademarks are used in your site and who owns them.

You need to determine whether your Web designer may hold valid ownership rights to your site. If you are using a Web site designer who is not an employee, you will probably want to have a work for hire agreement prepared. If the Web designer has already designed your site without a work for hire agreement, you will probably want to negotiate an assignment of copyright which will transfer all the designer’s rights to you. Of course the designer cannot transfer to you any rights that he or she doesn't own; for example, the designer may have downloaded licensed designs belonging to others or designs which are in the public domain. A good assignment of copyright contract will contemplate the constantly changing nature of new media and technologies, and will recite who will own the copyright in the event that the design is subsequently used in other forms e.g. a video game. If the Web designer will not assign his or her copyright interest, you should at least have a license negotiated so that you can use the designs.

There are other legal issues to be considered before you post or update your Web site. Make certain, for example, that you are not making potentially libelous claims against a person or company. Remember that even one who merely repeats a libel can be equally liable as the originator of the libel. Also make certain that you are not using the name or likeness of someone else without their consent. The unauthorized use of someone else's name or likeness can lead to serious legal consequences, including a suit for invasion of privacy.

The above analysis contains just a sampling of some of the legal issues that may be involved in the use of your Web site. If you need legal advice call our office at (714) 505-2700 or e-mail us at smithlaw@darrensmithlaw.com.

WHAT IF SOMEONE IS USING METATAGS WITH MY COMPANY’S NAME IN IT TO PROMOTE ITS BUSINESS? If your name is trademarked and a competitor is using that trademark in its metatags, then you may have an action for trademark violation and unfair business practices. By way of background, most Web pages are written in HTML code, which is a page description language describing how the Web page is supposed to look. You can view the invisible HTML code of a Web page by right-clicking anywhere on the page and then selecting the term “source” from the menu. This will show the HTML object code which operates as the source of information that generates the Web page.

In addition, there are also tags that describe the content of the Web page called “metatags”. Certain metatags are used as keywords by many search engines to determine how to index a given Web page.

Unfortunately, some devious individuals have planted a commercial competitor's trademark in their metatags in order to divert customers who are seeking someone else's product on a search engine. If offenders use your company's name in their metatags, a person searching for your site on the internet may inadvertently be guided to the sites of others.

This type of activity was alleged in Playboy Enterprises, Inc. v. Calvin Designer Label. In that case, the US District Court issued a preliminary injunction against the use of the “Playboy” trademark in hidden meta-tags located in the HTML source of Web pages in an adult Web site. The intended diversion of a competitor's customer by use of the competitor's own trademark was deemed by the court to be a tactic of unfair business competition, causing the Playboy trademark to be deemed “diluted”.

In Brookfield Communications Inc. v. West Coast Entertainment Corp. No. 98-56918 (9th Cir. April 22, 1999) the appellate court enjoined the defendant from the using the “moviebuff” trademark owned by plaintiff in the defendant’s meta tags. The court found that the use of the “moviebuff ”mark in meta tags would cause prohibited “initial interest confusion” since Web surfers looking for plaintiff would initially be confused as to whose Web site they were on. Not all courts follow this reasoning, however. A district court in Massachussets rejected Brookfield's “initial interest confusion ”doctrine in Hasbro, Inc. v. Clue Computing, Inc., Civ.Act. No. 97-10065-DPW (D. Ma., Sept. 2, 1999) and found that “[A]n initial confusion on the part of Web browsers...is not cognizable under trademark law.

In another case, Bally Total Fitness Holding Corporation v. Andrew S. Faber, 29 F.Supp.2d 1161 (C.D.Cal., Nov. 23, 1998) a district court found in favor of the defendant and dismissed claims of trademark infringement and dilution brought by Bally. In that case, the defendant operated a Web site titled “Bally sucks” in which defendant aired criticism of Bally's operations and he used the plaintiff's registered trademark in defendant' s metatags. The court found that even though defendant's site opened with an image of Bally's federally registered trademark “Bally” across which appeared the word “sucks”, that site stated that it was unauthorized, that no products were sold or offered for sale on the site. The court further that no confusion was created since people would reasonably assume that Bally did not sponsor the site and no dilution occurred since defendant 's use was not commercial. In addition, the court noted that a party has the right to use an entity's trademark in its meta tags to promote a non-commercial site critical of the entity that owns the mark.

Based on the foregoing, there are still unresolved legal issues to be decided in the use of metatags on your Web site. Your best bet is to seek the counsel of an internet attorney is you have any questions. Call our office at (714) 505-2700 or e-mail us at smithlaw@darrensmithlaw.com.

HOW CAN I SHARE MY MILLION DOLLAR IDEA WITH INVESTORS WITHOUT THEM STEALING IT? I always advise my clients to have a non-disclosure agreement drafted and signed by all parties before they share their ideas. Non-disclosure agreements vary depending on the individual facts and the complexity of the work involved but should at a minimum include the following:

The agreement should specifically define what constitutes the confidential information and should also define what is not confidential. The agreement should state that the act of disclosing does not transfer rights of any kind in or to the confidential information from you, the discloser, and that all rights are reserved to you. Ideally for you, the non disclosure agreement should not only prevent disclosure by the recipient, but also make the recipient responsible for preventing disclosure by third parties as well. It should recite in what manner the recipient may use the confidential information and whether or not copies may be made (and if so, what happens to the copies once the agreement ends).

There should be a term for the agreement, which may be of longer duration if the idea is complex in its scope or execution, and the recipient must be bound to hold in confidence the information provided even after the term ends. Also, the agreement should spell out your remedies in the event that of a breach of the agreement, which should include injunctive relief to immediately stop the recipient from disclosing your idea. Also, you will want the recipient to consent to venue in the court nearest you in the event of a breach of the agreement.

If your idea is important to you, then you need a skilled attorney to negotiate and to prepare a non-disclosure agreement which will protect you and your idea. Call our office today at (714) 505-2700 for an appointment or e-mail us at smithlaw@darrensmithlaw.com.