Monday, April 23, 2007
Memo #12/13-International Internet Issues
This Memo will focus on the issue of Cybersquatting on the Internet, and the challenge for trademark owners in attempting to stop a cybersquatter from misappropriating a trademark. What is a cybersquatter? In a simplified nutshell, a Cybersquatter obtains an Internet domain name that uses language that is very similar to an existing trademark. Or the squatter looks for a new company that has failed to register the most likely domain names that one would use to market your brand. In many cases, the domain names obtained are misspellings or slightly modified from the trademark holder's website. Here is an example (which is not actual, but just a intellectual thought). if the main website for Coca-Cola is www.coke.com or www.coca-cola.com, a cybersquatter would attempt to register www.koke.com or www.koka-kola.com or other variations. Then the cybersquatter would then populate the website with ads and wait for the consumer/user to enter the misspelled website and visit the site (driving up viewership numbers and earning more money from ad sales). Of note, there is also a concern for malicious use, such as posting a virus or malicious code on the squatted website, or directing consumers to a competing product (sending a user looking for Coca-Cola to a Pepsi website). Also there are legitimate uses for a misspelling, such as a personal name (morgan&stanley.com instead of the site for the MorganStanley company, morganstanley.com) or selling a legitimate product. I will ignore this issue and simply focus on squatters looking to drive-up ad revenues.
Why is this an issue? Well companies look to protect their trademarks and to protect their market by directing customers to their main website. Trademark holders want to own misspelled or one-off websites so as to direct the use to the main website. International users, where vagaries in language could send a user to a misspelled site (of course the same problem happens within the U.S. of course).
So why is cybersquatting an international issue? Well, because many of the Domain Name registrations occur outside of the United States through procedures established by ICANN. The Patent and Trademark Office for the United States has 3,000,000 registered trademarks. But there are 33,000,000 registered domain names throughout the world. There is a likelihood that the trademark holders will face a cybersquatting issue in an attempt to protect their trademarks. And if a cybersquatter is outside of the U.S., American law and courts are helpless to stop them. That is why ICANN, through the World Intellectual Property Organization ("WIPO") have established procedures and arbitration panels to help fight against cybersquatting. Domain Name registration services have been required by ICANN, as the root authority for the DNS service, to follow the arbitration panel decisions.
Thus, international cybersquatting is one example of establishing a quasi-judicial solution to an International Internet issue.
This Memo will focus on the issue of Cybersquatting on the Internet, and the challenge for trademark owners in attempting to stop a cybersquatter from misappropriating a trademark. What is a cybersquatter? In a simplified nutshell, a Cybersquatter obtains an Internet domain name that uses language that is very similar to an existing trademark. Or the squatter looks for a new company that has failed to register the most likely domain names that one would use to market your brand. In many cases, the domain names obtained are misspellings or slightly modified from the trademark holder's website. Here is an example (which is not actual, but just a intellectual thought). if the main website for Coca-Cola is www.coke.com or www.coca-cola.com, a cybersquatter would attempt to register www.koke.com or www.koka-kola.com or other variations. Then the cybersquatter would then populate the website with ads and wait for the consumer/user to enter the misspelled website and visit the site (driving up viewership numbers and earning more money from ad sales). Of note, there is also a concern for malicious use, such as posting a virus or malicious code on the squatted website, or directing consumers to a competing product (sending a user looking for Coca-Cola to a Pepsi website). Also there are legitimate uses for a misspelling, such as a personal name (morgan&stanley.com instead of the site for the MorganStanley company, morganstanley.com) or selling a legitimate product. I will ignore this issue and simply focus on squatters looking to drive-up ad revenues.
Why is this an issue? Well companies look to protect their trademarks and to protect their market by directing customers to their main website. Trademark holders want to own misspelled or one-off websites so as to direct the use to the main website. International users, where vagaries in language could send a user to a misspelled site (of course the same problem happens within the U.S. of course).
So why is cybersquatting an international issue? Well, because many of the Domain Name registrations occur outside of the United States through procedures established by ICANN. The Patent and Trademark Office for the United States has 3,000,000 registered trademarks. But there are 33,000,000 registered domain names throughout the world. There is a likelihood that the trademark holders will face a cybersquatting issue in an attempt to protect their trademarks. And if a cybersquatter is outside of the U.S., American law and courts are helpless to stop them. That is why ICANN, through the World Intellectual Property Organization ("WIPO") have established procedures and arbitration panels to help fight against cybersquatting. Domain Name registration services have been required by ICANN, as the root authority for the DNS service, to follow the arbitration panel decisions.
Thus, international cybersquatting is one example of establishing a quasi-judicial solution to an International Internet issue.
Monday, April 9, 2007
Articles Associated with Memo #11
Appleinsider.com response by Norway Ombudsman to Apple-EMI announcement.
Appleinsider.com original consumer complaints from Norway.
Appleinsider.com original consumer complaints from Norway.
Memo #11-Apple and Norway: an antitrust issue?
Many of you may have followed the recent EMI-Apple agreement to being selling music through the iTunes music store that is unencumbered by Digital Rights Management ("DRM") restrictions. My focus is on the response made in Norway to this new deal. Why Norway, you may ask? Well in the last year, the Norwegian Consumer Council lodged a formal complaint against Apple with the Norway Consumer Ombudsman. The charges were related to Apple's use of FairPlay DRM to protect music files downloaded from the Norway version of iTunes (Apple has long differentiated the iTunes Stores based on country of origin of the purchaser--the reasons and capabilities to do so is beyond the scope of this entry). The charges stated the FairPlay system violated Consumer Protection laws for Norway. n.1 By imposing FairPlay on the music bought through the iTunes Store, and technologically limiting playback of FairPlay-wrapped music files to the iTunes program and the iPod, the consumer is concerned with anti-competitive tying of the two products. Other Charges include the limited liability Apple would face in the country for security holes created by the FairPlay system and that the End User License Agreements ("EULA") imposed by Apple violate Norwegian law because a consumer in Norway cannot be forced to accept the choice of law provisions contained in the EULA. n.2
This is an interesting series of arguments because of a single, fundamental issue. What happens if Apple simply pulls up stakes in Norway and simply refuses to deal with Norwegian consumers? Nothing that I have been able to find would preclude Apple from simply dropping any and all support for the Norway version of iTunes, either in a technological or legal sense. There of course would be ramifications from such a move. Boycotts of other Apple products sold in Norway; outright rejection of the iPod in the country; support found in other European countries leading to a greater boycott of Apple; and of course, the public relations backlash related to the move. However, the major issue remains. The Norwegian consumer would be harmed by losing full access to one of the few competitors in the legal music download market. This concern is found in the fact that the Ombudsman has established a September deadline for Apple to respond to these charges with ways of improving the store for fairness. It is legitimate to think that the Ombudsman is hoping for additional pressure to be placed on Apple (such as the European Union antitrust forces going after Apple on their own) which will prevent Apple from simply withdrawing from the Market. For evidence, see the praise given by the Ombudsman to Apple and EMI for taking this first step towards removing DRM, for the ombudsman fails to mention concerns that the music will be sold as AAC files (which only a few players support as of now) and the higher prices being charged (which also provides higher bitrates). These issues were not mentioned by the ombudsman.
Thus, it is clear that attempting to enforce a stronger antitrust/consumer protection then what is found in the home country of the company raises serious questions about the unintended consequences. If a firm does not want to be subject to the antitrust laws of a country, and can economically afford to withdraw, then there is nothing to prevent this action, resulting in greater harm to the consumers the laws were designed to protect.
1. AppleInsider.com, Norwegian official applauds Apple-EMI deal, asks others to follow, April 2, 2007, http://www.appleinsider.com/article.php?id=2625
2. AppleInsider.com, Norwegian consumer group opposes iTunes TOS, June 7, 2006, http://www.appleinsider.com/article.php?id=1792
Many of you may have followed the recent EMI-Apple agreement to being selling music through the iTunes music store that is unencumbered by Digital Rights Management ("DRM") restrictions. My focus is on the response made in Norway to this new deal. Why Norway, you may ask? Well in the last year, the Norwegian Consumer Council lodged a formal complaint against Apple with the Norway Consumer Ombudsman. The charges were related to Apple's use of FairPlay DRM to protect music files downloaded from the Norway version of iTunes (Apple has long differentiated the iTunes Stores based on country of origin of the purchaser--the reasons and capabilities to do so is beyond the scope of this entry). The charges stated the FairPlay system violated Consumer Protection laws for Norway. n.1 By imposing FairPlay on the music bought through the iTunes Store, and technologically limiting playback of FairPlay-wrapped music files to the iTunes program and the iPod, the consumer is concerned with anti-competitive tying of the two products. Other Charges include the limited liability Apple would face in the country for security holes created by the FairPlay system and that the End User License Agreements ("EULA") imposed by Apple violate Norwegian law because a consumer in Norway cannot be forced to accept the choice of law provisions contained in the EULA. n.2
This is an interesting series of arguments because of a single, fundamental issue. What happens if Apple simply pulls up stakes in Norway and simply refuses to deal with Norwegian consumers? Nothing that I have been able to find would preclude Apple from simply dropping any and all support for the Norway version of iTunes, either in a technological or legal sense. There of course would be ramifications from such a move. Boycotts of other Apple products sold in Norway; outright rejection of the iPod in the country; support found in other European countries leading to a greater boycott of Apple; and of course, the public relations backlash related to the move. However, the major issue remains. The Norwegian consumer would be harmed by losing full access to one of the few competitors in the legal music download market. This concern is found in the fact that the Ombudsman has established a September deadline for Apple to respond to these charges with ways of improving the store for fairness. It is legitimate to think that the Ombudsman is hoping for additional pressure to be placed on Apple (such as the European Union antitrust forces going after Apple on their own) which will prevent Apple from simply withdrawing from the Market. For evidence, see the praise given by the Ombudsman to Apple and EMI for taking this first step towards removing DRM, for the ombudsman fails to mention concerns that the music will be sold as AAC files (which only a few players support as of now) and the higher prices being charged (which also provides higher bitrates). These issues were not mentioned by the ombudsman.
Thus, it is clear that attempting to enforce a stronger antitrust/consumer protection then what is found in the home country of the company raises serious questions about the unintended consequences. If a firm does not want to be subject to the antitrust laws of a country, and can economically afford to withdraw, then there is nothing to prevent this action, resulting in greater harm to the consumers the laws were designed to protect.
1. AppleInsider.com, Norwegian official applauds Apple-EMI deal, asks others to follow, April 2, 2007, http://www.appleinsider.com/article.php?id=2625
2. AppleInsider.com, Norwegian consumer group opposes iTunes TOS, June 7, 2006, http://www.appleinsider.com/article.php?id=1792
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