FENNEMORE CRAIG I-LAW
January 16, 2001

Fennemore Craig counsels clients on Internet, branding and e-commerce issues and protection and commercial exploitation of patents, copyrights, trademarks, and trade secrets. Clients include a range of domestic and international businesses from Internet start-ups to large multi-nationals, in industries ranging from computer software and hardware to pharmaceuticals, toys, games, optics, and electronics.

• We are pleased to announce that Susan Stone Rosenfield has joined the firm as "of counsel" status in the Intellectual Property Practice Group. Rosenfield, a Registered Patent Attorney, joins Fennemore Craig from Bryan Cave, LLP, where she counseled clients in all aspects of intellectual property matters, including contract negotiations and due diligence investigations with regard to mergers and acquisitions, as well as establishment and management of clients' patent, trademark and copyright portfolios. Rosenfield received her B.S. degree in biology from Virginia Polytechnic Institute and State University and her J.D. from George Mason University in Arlington, Virginia.

• Canada has enacted a new strict Internet privacy law that will impact U.S. and other foreign firms doing business in Canada. The rules govern the private sector's collection, use, disclosure of, and access to, personal information. The rules will be phased in for various industries over the next three years. Link

• Yahoo! has announced that it will no longer allow auctions for Nazi items and other hate materials on its site. Yahoo! says that the decision is unrelated to a French judge's decision barring Yahoo! from proceeding with the sale of Nazi materials online in France. Link

• Free speech advocates are worried that Yahoo's decision to stop the auctioning of Nazi materials will encourage other groups to use other foreign courts to try to stop free speech that is coming from the U.S. Link

• Sometimes going after online critics can backfire. A website critical to the owner of the NFL's Cincinnati Bengals, mikebrownsucks.com, has received a letter from the Bengals threatening it with a trademark lawsuit if the website does not stop using content from the Bengals official website and if it does not give up its parody of the Bengals logo. mikebrownsucks.com has agreed to stop using content from the official website, but refuses remove its "parody" of the Bengals logo. The press coverage of this dispute emphasizes the megaphone a trademark owner can unintentionally provide to a critic by taking legal steps against that critic. Link

• In case anyone needs reminding, e-mail at work is generally not private and having an e-mail policy is useful. Indeed, over the holidays, Computer Associates fired several employees for sending sexually explicit e-mails from their work computers. Computer Associates stated that doing so was against the company's e-mail policy. Link

• Another group of employees have been fired for improper use of e-mail. Bart and Kermit have become an item, at least in someone's "e-magination," causing another group of employees to be fired for improper use of e-mail. In this situation, the e-mails involved Bart Simpson and Kermit the Frog engaging in obscene activities that cannot be described in a family Internet newsletter. This brings to mind the sage advice of Fennemore Craig's Ray Harris: "Humor is not a good defense." Again, note that the company had a clear e-mail policy which allowed it to take appropriate action for improper e-mail usage. Link

• The U.S. Supreme Court has declined to review a Virginia State law that prohibits public employees (including university professors, librarians and researchers) from visiting online pornography sites using state computers. Six university professors had argued that the law violates the First Amendment, but that argument was rejected by a U.S. Court of Appeals. The U.S. Supreme Court refused to review the lower court's decision. Link

• Accessing a private website without permission may constitute a violation of the Federal Wiretap Act and/or the Stored Communication Act. The Ninth Circuit Court of Appeals reinstated a lawsuit, filed by pilots, against Hawaiian Airlines. The pilots claim that the airline viewed the pilots' secure websites under false pretenses. Link

• Electronic commerce is setting off a new turf war in an old industry. As book publishers have begun selling e-books directly to consumers thereby eliminating the book retailers, retailers have decided to publish their own e-books. For example, Barnesandnoble.com has recently set a royalty rate for electronic authors that is higher than that traditionally given by publishers. Link

• Users of Ebay will begin receiving telephone solicitations from telemarketers, even if the user selected not to receive such solicitations when they registered with Ebay. Ebay explained the new policy by stating that during registration (for part of last year) its default settings were mistakenly set so that users would not receive telemarketing solicitations unless they checked a particular box. Therefore, anyone who chose not to receive telemarketing solicitations will get it anyway, unless those individuals change their settings again. Link Link

• A report says shoppers made more than $52 million orders and spent $6 billion online this holiday season. This amount is a 60% increase over last year. Another report says that the amount spent was $8.7 billion. A third study shows that U.S. consumers spent $9.8 billion in online sales during the holiday season. This more than doubles the amount of sales from the 1999 holiday season. It also appears that shoppers learned from 1999 experiences and did their shopping prior to the last week before Christmas, as sales during that week declined. Link Link

• The trade dress of a line of products must have a consistent look in order to have trade dress protection. Whether the look is consistent is a threshold question that must be addressed prior to deciding other critical trade dress issues such as functionality, distinctiveness or likelihood of confusion. In this case, Rose Art Industries, the maker of arts and crafts toys targeted to girls, claimed trade dress protection in a line of crayon products. The Third Circuit Court of Appeals reversed and remanded a decision refusing to grant Rose Art a preliminary injunction. Link

• In the year 2000, the number of U.S. trademark applications increased by 27% and patent applications by 8%. Link

• As clients of Fennemore Craig know, the mere registration of a domain name does not give the domain name owner any trademark rights. Thus, in the situation where someone begins using a trademark after someone else has registered (but not used) the domain name, the trademark user will have senior trademark rights to the domain name holder. Indeed, this is so, even if the trademark holder knew that the other person had previously registered the domain name. Link

• Air ball. NBA Properties, the company that manages and licenses NBA trademarks, has failed to recover knicks.com in a UDRP arbitration. The arbitrator reasoned that the KNICKS trademark was in fact owned by Madison Square Garden, the company that owns the New York Knicks -- not by NBA Properties. Apparently, NBA Properties failed to submit to the arbitrator any written authorization to act on behalf of the trademark owner. Link

• Here is another example showing that humor is not a good defense. Ebay has been sued by Re/Max, a realtor, because Ebay used "for sale" signs in its advertising that allegedly look like Re/Max's signs. Re/Max is claiming that its goodwill has been misappropriated. Ebay claims that the commercial was a spoof. Link

• An Israeli domain name registrar has begun registering Hebrew domain names. Link

• ICANN has been asked by Verio, an Internet access company, to end the accreditation of Register.com as a domain name registrar. Verio claims that Register.com has failed to allow Verio access to the "Whois" database, which contains contact information for all domain name owners. Verio wants access for marketing purposes, and Register.com's accreditation agreement requires Register.com to make "Whois" available for all purposes except spam. On the other hand, Register.com has obtained a court injunction barring Verio from accessing "Whois" for marketing purposes because Verio was falsely claiming a connection to Register.com in its marketing to domain name owners. ICANN may be on the horns of a dilemma. Verio appears to have been acting improperly, but Register.com also appears to be violating its accreditation agreement. Should ICANN remove Register.com's accreditation, then ICANN rewards Verio despite its improper conduct. Should ICANN do nothing, then ICANN may be sending a message to registrars that they can ignore ICANN accreditation requirements. Link

• As readers of I-LAW will recall, it recently became possible to register domain names using Asian characters. As surely as day follows night, a recent cybersquatting dispute has now arisen over a domain name using Asian characters. The English name of the disputed domain name is Sankyo.com. Link

• Napster, the online music purveyor who has been the defendant in numerous copyright lawsuits, has now sued an online retailer for selling clothing that display Napster's cat-design trademark. Link Link

• In a case involving the Harry Potter series, the author was accused of taking certain characters and phrases from someone else's earlier work. The prior author claimed both reverse palming off and copyright infringement. The court has held that the reverse palming off claim was sufficiently different than the copyright claim to avoid dismissal. Link

• Business method patents are okay in the U.S., but banned in the E.U. European companies are worried that this puts them at a disadvantage. Link

• A delay in paying a patent maintenance fee was not "unavoidable" when the owner of the patent failed to monitor whether the fee was paid. Thus, the USPTO could properly refuse to reinstate a patent. Link

DISCLAIMER

The information contained in this e-mail has been prepared by Fennemore Craig for informational purposes only and is not legal advice. It is provided only as general information which may or may not reflect the most current legal developments. This information is not provided in the course of, and receipt of it does not constitute, an attorney-client relationship, and it does not substitute for obtaining legal advice from an attorney licensed in your state. Legal advice should take into account the specific facts of your situation, and you should not draw any particular conclusions from the information presented here. You should seek professional legal counsel before acting upon any of the information contained in this e-mail. Before sending information to us, however, please speak with one of our lawyers and get authorization to send that information to us.

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