As you’ve no doubt read there are two pieces of anti-piracy legislation before the US Congress: SOPA and the PROTECT IP Act (“PIPA”). While their stated purpose is to prevent piracy, copyright and trademark violations in another sense they can be seen as media companies and others using legislation to protect their legacy business models.

SOPA has been widely written about and criticized. It’s now increasingly unlikely to pass in its current form — luckily. The less-exposed PIPA is equally bad in many respects and grants sweeping powers to private litigants and courts in the interest of protecting copyright owners’ property.

This explanation of what SOPA would permit comes from the New York Times:

Under the bill, copyright owners could direct payment providers like Visa and advertising networks like Google’s to cut off business to a Web site simply by filing notice that the site — or “a portion” of it —“engages in, enables or facilitates” intellectual property infringement or is being willfully blind to it . . .

If copyright owners could starve a Web site of money simply by telling a payment processor that the site was infringing on intellectual property, the bill could stymie legitimate speech . . .

Another provision would allow the attorney general to sue foreign sites that “facilitate” piracy, and to demand that domestic search engines stop linking to them and that Internet service providers redirect traffic . . . 

Despite the fact that SOPA isn’t law, a federal (district court) judge in Nevada named Kent Dawson is acting as though it is. Numerous articles have been written this week about his order to Google, Bing, Yahoo, Facebook, Twitter and others to  ”de-index” the domain names of literally hundreds of websites that luxury goods maker Chanel alleges sell counterfeit versions of its products.

Here’s the relevant portion of Dawson’s order (.pdf) regarding de-indexing:

The Group II Subject Domain Names shall immediately be de-indexed and/or removed from any search results pages of all Internet search engines including, but not limited to, Google, Bing, and Yahoo, and all social media websites including, but not limited to, Facebook, Google+, and Twitter until otherwise instructed by this Court or Plaintiff that any such domain name is authorized to be reinstated, at which time it shall be reinstated to its former status within each search engine index from which it was removed.

There are numerous procedural and jurisdictional problems with the case. In particular, Google, Bing, Facebook, Yahoo and Twitter are not parties to the litigation. The court has no jurisdiction or authority to order de-indexing of these allegedly offending sites. However, under SOPA it would have such authority to order social networks and search engines like Google to de-index sites without having formal jurisdiction over them.

The implications are pretty scary from a legal-due process standpoint and from a free speech perspective as well.

We reached out to both Google and Microsoft for comment and they offered official “no comment” statements. It’s in their respective interests to not comply with the court’s order. Doing so would validate the actions of a “rogue judge” exceeding his authority.

Postscript: Texas Republican Congressman Lamar Smith “blasted” Google’s opposition to SOPA as self-serving. However many of the bill’s supporters in Congress are responding to intense lobbying by commercial interests in the US such as the motion picture industry. The problem is not piracy, which everyone agrees is bad, but the potential authority granted private litigants and the courts on their behalf to seize domains, chill speech and shut down businesses, with limited due process.

The European Union’s Court of Justice has ruled in the long-running Interflora case against Marks & Spencer, which involves bidding on trademarked terms, and the decision is no clear victory for either party. Instead, it OKs trademark bidding so long as the resulting ad offers an alternative to the mark holder’s service and doesn’t cause dilution, tarnishment or adversely affect the functions of the trademark.

The case involved a situation in which retailer Marks & Spencer bid on the florist network’s trademarked keywords and phrases, including variants, in Google AdWords in the United Kingdom. Interflora accused M&S of unfairly trading on its trademarks.

Interflora, for its part, says it is “delighted” with the ruling. It does limit advertising including trademarked keyword bidding in certain cases:

• Where a reasonable internet user might be confused about the origin of the goods or services offered in the advertisement.
• Where it damages the trademark holder’s ability to maintain a good reputation or advertise itself successfully.
• Where the ad takes unfair advantage of the “distinctive character or repute” of the trademark or where the advertising harms the distinctive character or repute. An example would be if the advertising would contribute to turning the trademark into a generic term.

The final decision as to whether Marks & Spencer is liable in the case will come when the High Court of the UK applies the ruling of the European court. That’s expected to occur next year.

Previously, the European Advocate General had recommended against allowing trademark bidding.

In the European Union, Google permits the use of trademarks as keywords, except in cases where they would be “confusing as to the origin of the advertised goods and service.” It allows other uses such as competitive keyword bidding and bidding by resellers of the goods being advertised.

The watchdog group sued Google over deceptive ads back in 2007. The federal judge, Justice John Nicholas dismissed the case saying the Google was not liable for advertisers using competitors’ names and trademarks in their ads.

You can read the full court document over here.

A Google spokeswoman said, “Our guiding principle has always been that advertising should benefit both advertisers and users, and our aim is to ensure that ads are relevant and useful.” You can read the ACCC’s response to the ruling over here.

Related Stories:

• Australian Watchdog Sues Google Over Deceptive Search Ads
• Australian Watchdog Has Day In Court Over Google “Selling Top Spot”

Today’s decision involves five of the 50 defendants that Google originally sued: Bloosky, Just Think Media, Crush, Hyper Interactive, Search 4 Profit, and Viable. Google had previously settled with another defendant, Pacific WebWorks, last June.

The companies created a variety of online marketing schemes that used Google’s name, such as “Google Cash,” “Google Profits” and “Google Money Kit.” In its suit, Google said that not only do customers of those companies not get the chance to make money, but they also face monthly fees that range as high as $80/month.

Among other things, the settlement permanently forbids the companies from “using in any manner the term GOOGLE, any of Plaintiff’s Google Marks, or any terms phonetically or confusingly similar thereto in connection with the marketing, selling, offering for sale, displaying, promoting or advertising of work-at-home business opportunities, work-at-home products, and/or work-at-home services.”

As part of the settlement, none of the five companies are admitting that Google’s claims are true. And Google is dismissing its claims against the remainder of the original 50 defendants.

(Via TechCrunch. Image courtesy of Shutterstock.)

Image courtesy Shutterstock.com

The European Advocate General is recommending that the Court of Justice of the European Union rule against retailer Marks & Spencer for bidding on the trademarked terms of Interflora, the flower delivery network company.

If the Court of Justice acts on the findings, it could effectively spell the end of bidding on competitors’ trademarks in the European Union. Unlike other cases, like Luis Vuitton v Google, this case pitted the trademark owner, Interflora, directly against the advertiser bidding on the trademarked terms, rather than involving Google, or any other search engine, as an intermediary. In the Louis Vuitton case against Google, the search engine was awarded a victory last year.

Interflora is, understandably, pleased. “Together with our network of 1800 independent florists, we have spent a lot of time and money over the last 80 years building the reputation of the Interflora brand. We are known as ‘the flower experts’ and our brand stands for quality and service,” Michael Barringer, Interflora’s marketing director, said in a statement. “We are very proud of the Interflora brand and want to protect it for our customers, florists and the future.”

In the European Union, Google permits the use of trademarks as keywords, except in cases where they would be “confusing as to the origin of the advertised goods and service.” It allows other uses such as competitive keyword bidding and bidding by resellers of the goods being advertised. The Advocate General found whether the search engine allows trademark bidding or not is immaterial to the case, letting Google and other search engines off the hook.

The European Advocate General found that the trade mark owner is entitled to bar someone from using a trademark as a keyword, “in the case where that ad does not enable an average internet user, or enables the said user only with difficulty, to ascertain whether the goods or services referred to in the ad originate from the proprietor of the trademark or an undertaking economically connected to it or from a third party.” Additionally, he found that that the trademark owner has the right to bar the use of the term “when the competitor’s sponsored link is liable to lead some members of the public to believe that the competitor is a member of the trademark proprietor’s commercial network when it is not.”

The EU Court of Justice is reportedly expected to issue a ruling on the case within six months.

Thanks to Blogstorm.co.uk for the tip!

Image courtesy Shutterstock.com

A website builder and SEO firm has been held liable in federal court in a case in which it was accused of enabling the sale of counterfeit goods. Bright Builders faces a $770,000 fine for damages in the judgment, handed down in U.S. District Court in South Carolina last week, while its client was only fined $28,000.

The lawsuit was filed by the Roger Cleveland Golf Company, which makes golf clubs and related products, accusing Christopher Prince, the owner of the copycatclubs.com web site, of selling counterfeit Cleveland clubs. It also contended that Bright Builders helped Prince, and his company, Prince Distribution, to build a web site. This included helping with search engine optimization (SEO) — so that the site would come up on searches for Cleveland’s trademarked terms. Bright Builders denied the charges in a written motion, and hadn’t responded to a request for comment by publication time.

According to the plaintiffs, Bright — like many site hosting companies — provided SEO services, including review of the sites for search engine visibility, a “quick start” for marketing, keyword research, a “tune up” including a “keyword rich title and description,” along with submission of the site to more than 2,500 search engines and directories. The word “Cleveland” was embedded within the site metadata, the plaintiffs say, and the online store featured marketing copy advertising that, “we are your one stop shop for the best COPIED and ORIGINAL golf equipment on the internet.”

Additionally, the plaintiffs said that Bright Builders helped Prince find drop-shippers to provide products to the business. Because of its activities, Cleveland contended that Bright Builders should have known about the counterfeiting activities, and therefore contributed to the liability.

“For Internet Intermediaries like SEOs and web hosts, this should be a cautionary warning,” wrote Christopher Finnerty, a partner at Nelson Mullins Law Firm in Boston who represented Cleveland Golf and its parent company, Srixon. “The jury found that web hosts and SEO’s cannot rely solely on third parties to police their web sites and provide actual notice of counterfeit sales from the brand owners. Even prior to notification from a third party, Internet intermediaries must be proactive to stop infringing sales when they knew or should have known that these illegal sales were occurring through one of the web sites they host.”

Though Bright Builders, along with Prince, have been found liable in a jury trial, it’s unclear exactly what implications this case has for other SEOs or website hosts, in part because of the seeming lack of a vigorous defense. The attorney for Bright Builders submitted a very vague motion arguing that it be dropped as a defendant from the case, denying everything but failing to cite legal principles or provide supporting evidence.

“We don’t have a good sense of how likely it is that other web designers or SEOs/hosts will be sucked into the same liability trap,” writes intellectual property attorney Eric Goldman on his Technology & Marketing blog. “I do think we have some good reason to believe that courts are allergic to the entire ‘copycat’/'replica’ business. Those code-words aren’t fooling anyone.”

The ruling was done in an appeals court in the case between Network Automation and Advanced Systems Concepts. Both companies sell scheduling and management software and Network Automation purchased the keyword “ActiveBatch,” a trademarked product of Advanced Systems Concepts on the Google and Bing search ad networks. Advanced Systems Concepts sued Network Automation and won in court, but that was overturned in appeals court.

The reason the appeals court overturned the original decision was because the lower court did not take into account the landing page nor the ads being sectioned off and labeled as ads. Due to those facts, the appeals court felt there was no confusion as to the ad.

I should note that both Google AdWords and now even Microsoft adCenter share the same trademark rules, allowing advertisers to bid on trademark keywords, in many cases. Plus, advertisers can use the trademarked text in their ad, again – in many cases.

You can read Google’s official AdWords trademark policy as well. For the full court ruling, see this PDF document, courtesy of Gary Price.

Related Stories:

• Bing & Yahoo Align With Google’s Trademark Rules For Search Ads
• Google AdWords Trademark Case Goes To U.S. Court of Appeals
• Google Wins Legal Battle Over AdWords Trademark Issue In Europe
• Google Approves Anti-Google Ad Despite AdWords Trademark Issue
• Court Reversal Brings Surprising Loss For Google In AdWords Trademark Case
• Louis Vuitton Offers Google More Trademark Trouble In Europe
• Google To Allow Trademarks To Be Used In AdWords Copy In US
• Google Wins Legal Victories In Europe, US On Copyright & Trademark Issues
• AdWords Trademark Policy Q&A With Terri Chen, Chief Trademark Counsel

Image courtesy Shutterstock.com

A Federal judge in California has denied Google’s motion to dismiss a “false association” claim in Daniel Jurin’s case against it, surprisingly reversing his own previous rulings. Intellectual property attorney Eric Goldman reported the development in his Technology and Marketing Law Blog.

Jurin has been waging a legal battle against Google for years, alleging that the search engine’s AdWords program infringes on his “Styrotrim” building materials trademark.

Federal District Judge Morrison C. England, Jr. issued the ruling in response to Google’s motions to dismiss various parts of Jurin’s second amended complaint in the case, which accused Google of breach of contract, false designation of origin, and false association.

Though the Judge has dismissed most of Jurin’s claims, this time he declined to dismiss the false association claim. In the claim, the Plaintiff alleges that Google’s AdWords program and its keyword suggestion tool create confusion about who the producer of Styrotrim is, or whether competitors are associated with the product.

“Plaintiff alleges that internet users who enter the keyword ‘Styrotrim’ on Defendant’s search engine, and view the websites for Plaintiff’s competitors in ‘Sponsored Links,’ may become confused as to which company is the producer of ‘Styrotrim,’ or whether competitors are associated with ‘Styrotrim,’” the Judge wrote in his ruling.

Hold off on filing those lawsuits, though, because Google’s argument in the motion to dismiss was that it had to be a competitor in the building materials industry to be subject to the false association claim. The judge denied that rationale, but hasn’t yet made a final ruling in the case.

Goldman warns prospective plaintiffs that they shouldn’t see this as encouragement to file lawsuits. “Listen up, plaintiffs: this case only offers false hope! This is a bad ruling and Jurin will unquestionably lose in the end,” he wrote on his blog. “Don’t buy your lawyer a new boat when you could invest those dollars in a better product or more effective marketing.”

“We want to make it easier for you to manage your search advertising campaigns,” said an e-mail sent by Microsoft to advertisers. “By aligning the adCenter trademark policy with the current industry standard, we hope to help simplify your marketing efforts across the various online advertising programs.”

Microsoft declined to discuss the change more fully.

The use of trademarks in search ad campaigns, either as keywords or as ad text, has been a controversial topic since the dawn of search marketing. Though Google is still fighting lawsuits on the subject, the company seems to feel confident that trademarks can legally be used in keyword targeting in the U.S. Google has changed its trademark policies over time, and now, Microsoft has followed Google’s lead, simplifying matters a bit for search marketers.

While none of the information is earth-shattering, it’s interesting to note that Rosetta Stone earns a better return-on-investment from advertising with Google AdWords than any of its other advertising methods. Between July 2007 and March 2010, for example, Rosetta Stone “made more than $27 million from orders placed by customers who used Google paid and organic referrals,” the court papers reveal. It also received 330,796 orders from paid search referrals. Another mildly interesting revelation: it takes consumers two to four weeks to decide whether to purchase Rosetta Stone software.

The unredacted version of the Google brief in the case was made public after a push by consumer group Public Citizen and trademark attorneys Eric Goldman and Martin Schwimmer. Goldman and Paul Levy of Public Citizen both wrote blog posts about the unredacted document. Levy said Google’s counsel told him that the redactions were made at the insistence of Rosetta Stone.

The case, in which Rosetta Stone accused Google of infringement for allowing others to use its trademarks as keywords to trigger the display of their AdWords ads, is currently being appealed by Rosetta Stone. The trial court judge issued a summary judgment in favor of Google in April of 2010.

Other portions of the unredacted brief reveal that Google helped Rosetta Stone catch criminals involved with credit card fraud and counterfeiting. Rosetta Stone even praised Google’s Trust and Safety team to the FBI.

Rosetta Stone may be embarrassed by one particular element revealed in the unredacted brief. A 2005 survey of the general Internet population found that unaided recognition of “Rosetta Stone” was less than 2%, and aided recognition rose only to 13%.