The Law of Social Media (Part III)

[Part I of this series of essays can be found at this permalink, Part II at this permalink].

3.  Trademarks, Genericide & “Twittersquatting”

Let’s assume, for purposes of discussion, that social media content — not limited to Tweets — cannot be trademarked. Whether that is correct will be ultimately determined, at some point, by a combination of the PTO and the U.S. Court of Appeals for the Federal Circuit.  What that (reasonable) assumption indicates is that trademark law is far more important for existing trademark holders who either (a) venture into the social stream and real-time Web in order to market and promote their brands, or (b) are confronted with third-parties using their trademarks, whether for commentary or profit, without consent, than it is for social media users generally.

(a)  The Aspirin of Social Media. Trademarks are property rights, both under US common law and pursuant to federal statute, the validity of which often hinges on two discrete issues — first use and “genericness.” People tend to forget that Bayer AG first invented aspirin in 1897 but lost its rights to the brand name in the United States by allowing it to escape into the public domain, i.e., go generic or commit “genericide,” a tragic commercial fate shared famously by Duncan Yo-Yo Co. (yo-yo) and Otis Elevator Corp. (escalator), among others. Generic terms of course cannot be trademarked.  As a result, such companies and products as varied as Xerox (photocopying), Kleenex (facial tissue) and Johnson & Johnson (band-aid) have stepped up outreach and litigation efforts to curtail use of the trademarked brands as nouns and to constrain their own usage, for instance by changing advertising jingles to add “brand” to the name (going from “I’m stuck on Band-Aids, ’cause Band-Aid’s stuck on me” to “I’m stuck on Band-Aid brand, ’cause Band-Aid’s stuck on me.”)

Welcome to Web 2.0, corporate IP police! Your task in protecting against genericide has become an order of magnitude harder because social media is immediate, difficult to search and presents such massive volume of content that periodic review of even a portion of it is clearly impossible. But as the historic lessons show, doing nothing risks colloquial usage of marks in ways that conflict with trademark holders’ long-term interests. There is no substitute for perseverance, hard as it may be in the context of real-time social streams.

Perhaps most vexing is that these very risks can be presented by a company’s best customers, its “fans.”  As PR specialist Rob Clark of the SMG Group notes:

So we all know the story. Imagine, a group of faithful enthusiasts falls in love with Super-Duper Brand (for the purposes of this illustration I’m using a fictitious name). They start a forum at superduperrocks.com, the maintenance of which they cover by selling superduperrocks t-shirts and other merchandise. A lawyer for Super Duper stumbles upon the site and fires off a standard cease and desist letter to attend to the trademark infringement. The community freaks out, both in terror of what a visit to court may cost and in anger of being turned on by the brand they adored and revered. The pundits point a spotlight on the issue and chuckle over what a stumble, what a gaffe, “who could possibly be foolish enough to attack your greatest evangelists?” Those who rail against the new media tools will waggle their fingers and declare, “These interwebs will doom us all.”

That’s  a debacle in the making.  The IP lawyer was obviously correct, but crowd-sourced demand letters will likely do more to alienate fans than protect the mark.  The balance between heavy-handed legal cease-and-desist letters, litigation and consensual licensing of permissible uses represents a major challenge to trademark holders in the emerging era of social media.

(b)  Safe Harbors, Impersonation and Infringement. So if that’s not bad enough, take the question of how trademark holders can prevent others from infringing (or diluting) their marks by scarfing up the words as profile identifiers on social media sites.  The short answer is, like all mark protection activities, vigilance. Yet as addressed in this section, at present the law is still developing and the statutory rules established to deal with improper use of protected trademarks on the Internet — mainly in the domain name and copyrighted content (music, movies, etc.) contexts — do not squarely apply to social media and the real-time Web.

It would be a pleasure, for my ISP and Web site clients, to report that the statutory safe harbor granted to Internet access providers — commonly known as “notice-and-takedown” — protects them against litigation for trademark infringement by social media users.  But that’s not necessarily the case at all.

First, the immunity provided to interactive computer services under the Communications Decency Act (47 U.S.C. § 230) applies only to screening and blocking of child pornography and other offensive Internet content, while the DMCA safe harbor in 17 U.S.C. § 512 is inapplicable if a “service provider” receives any “financial benefit directly attributable to the infringing activity” and “has the right and ability to control such activity.”  Whether the courts will construe these terms expansively is unclear. Yet it is clear that at least some social media providers both receive financial gain (which may not mean profitability, by the way), including advertising revenues, and have the ability to arrest infringing conduct by users. So while removing allegedly infringing UGC or profiles is a good business practice, it does not mean legal liability is eliminated.

Second, the provisions of the Anti-Cybersquatting Consumer Protection Act, 15 U.S.C. § 1125(d), limit the protection accorded vis-a-vis trademark holders to entities assigning “domain names,” defined narrowly as “alphanumeric designation which is registered with or assigned by any domain name registrar, domain name registry, or other domain name registration authority as part of an electronic address on the Internet.”  Social media profiles do not yet fall under this statute, at least facially.

So even in the case of simple “Twitterquatting” — the allocation by a social media network provider of a user name to someone who is either not the real person or who is using a trademarked phrase without permission — there is no compelling case to be made today for statutory immunity.  Recall that, in the early days of the commercial Web, Network Solutions (now VeriSign) was sued frequently by trademark holders under contributory infringement, conversion, negligence, unfair competition and other traditional causes of action for registering trademarks as domain names to people without legal rights to the marks.  See, e.g., Lockheed Martin Corp. v. Network Solutions, Inc., 193 F.39 980 (9th Cir. 1997).  And more recently, Google has litigated a series of cases in which famous brands (Vuitton, etc.) have alleged, with mixed results, that its AdWords program represents use by Google, as opposed to the advertisers paying for such keywords, of a protected mark in commerce, thus exposing Google to potential damages liability.  (I personally don’t agree with this legal theory, but the fact is that it has been accepted by a minority of courts.)

All of these theories, which parallel the claims brought by AOL and other ISPs against spammers before Congress made unsolicited commercial email illegal with the CAN-SPAM Act of 2003, can be asserted unless and until legislation is passed creating a national standard and preempting state law.  For instance, in his well-publicized (but later withdrawn) lawsuit against Twitter, Tony La Russa claimed that use of his name by another Twitter member constituted Lanham Act violations (trademark infringement, false designation of origin, dilution of a famous trademark), invasion of privacy under California Civil Code § 3344 and misappropriation of name and likeness.

It is no wonder, then, both Twitter and Facebook have established means by which rights holders can protect their trademarks from unauthorized use.  For Facebook, these include:

• Filing their trademark(s) online with Facebook, which will prevent any third-party users from acquiring the filed trademark as a username.  (Filing requires the name of the company, the trademark to protect, the federal registration number of the mark and the filer’s title and email address.)
• Not authorizing transfer or sale of user names in the hope that this will eliminate squatting or profit-driven transfers.
• Maintaining an online IP Infringement form which allows rights holders to protest after-the-fact unauthorized uses of their intellectual property.

Not unusually (see Part II), Twitter does things a little differently.  The Twitter terms of service (ToS) grant it the right to remove or suspend unilaterally any account that appears to or is claimed to violate another’s trademark rights.  These notice-and-takedown provisions are based on a “clear intent to mislead people” as the test for suspending unauthorized accounts.  However, they explicitly allows parody impersonation, using a standard of whether a “a reasonable person be aware that it’s a joke” as the criterion for a parody.  (The fact that the La Russa impersonator prominently labeled his profile as a fake plainly did noting to deter litigation, of course.) And those same guidelines have not stopped corporations from suing Twitter when they suspect others are “diluting” their marks, even before response to a takedown demand. Twitter has also responded as a business matter with a so-called “verified account” program for public figures.

Now on the substance of parody or so-called “gripe” users, trademark law is gradually becoming clearer, and works to favor the social media site rather than the personality. There are numerous obstacles with use of federal trademark law to prosecute a gripe user. Trademark infringement claims require that the defendant use the plaintiff’s mark, without consent,”in commerce” — a term that generally refers to the sale of a product. Parodies and product criticisms may use a plaintiff’s name or mark,but typically not to sell anything, rather to complain about or poke fun at the company. Trademark claims also demand that the defendant’s unapproved use of the mark must have confused reasonable consumers. However, because such third-party sites and content typically attack or lampoon the trademark holder, there is little risk that consumers could ever reasonably believe that such a site was operated by the trademark owner.

A recent Sept. 2009 decision by U.S. District Judge T.S. Ellis in Virginia, Bernard J. Carl v. BernardJCarl.com, focused on another element of trademark law — whether an individual’s name is a protectable trademark. The general rule is that names (first or last)  only qualify as trademarks if they have acquired a distinctive “secondary meaning.”

Controlling circuit authority clearly classifies the use offirst names or surnames as descriptive marks, which are inherently non-distinctive and accordingly are not protected under the Lanham Act absent a showing of distinctiveness. Thus,descriptive marks may gain the protection ofthe Lanham Act if they become distinctive by acquiring a secondary meaning within the relevant purchasing community — that is, a substantial number ofpresent and prospective consumers.

So, for instance, “Martha Stewart” probably has acquired a secondary meaning, to refer to her home decoration, gardening and food business.  The same problem would arise for claims of cybersquatting, because, according to Judge Ellis, to garner protection under the ACPA a personal name must have acquired secondary meaning at the time of its registration. The implications for social media sites are obvious, namely that even if there is a legal basis to challenge so-called “Twittersquatting” for celebrity impersonation, it probably does not lie in the realm of trademark infringement.

(c)  Trademarks and Deep Pockets. From the legal to the practical. All of the above is without regard to the fact that, like NSI in the 1990s, those who believe their interests or business have been damaged by use of a name, mark or other content by a social media subscriber are — as an economic imperative — inclined and very well incentivized to name as the principal defendant the company running the social network. When Hasbro had a problem with a Facebook application developer’s take off on “Scrabble” for a wildly popular Facebook game dubbed “Scrabulous,” it acted against Facebook under the DMCA, not (at least initially) against the smaller, and less well-endowed financially, developer. Likewise, when one game coder believed another had stepped on his trademark, he sued Facebook for infringement.

What these and many other anecdotes indicate is that when setting up and operating any social media site, a Web developer must take into account that it is the most visible, and some might say vulnerable, party to use of the litigation process for what I called “legalized blackmail.”  (Note, I have not trademarked that phrase, so you are free to use it!) Litigation defense is a cost of doing business in modern America.  And since the issue of knowledge is key to trademark defense — under the reasoning in Tiffany v. eBay Inc., social networks could be held liable for username squatting or infringement (on a contributory infringement theory), if they continue to provide services to users they know or have reason to know are engaging in infringement — programs that terminate user membership privileges at the slightest hint of unlawful use of content or marks are the best insurance.

Given the uncertainties surrounding the nascent law of social media, which as noted in Part I will most likely evolve out of the cauldron of litigation, the burden of litigation as a cost of doing business may be a steep one indeed. So as users, expect to see a whole array of self-protection measures by social media vendors.  “Verified accounts” and trademark take-down complaints are just the very early start.  The days of Twitter being praised for its laid-back, touchy-feely attitude towards trademarks are over, I believe, in just a short six months. And that, readers, is the speed at which things change in our world of the real-time Web!

In Part IV of this series of essays, we address the broader context of social media law, including whether there is anything really new here, or just “old wine in new bottles.”