New gTLDs Causing Trouble for Twitter

Screen Shot 2015-07-15 at 10.07.30 AMYesterday, a website that looked exactly like Bloomberg posted “news” that there was a $31 billion buyout offer for Twitter. Ummm not true! The website, called http://www.bloomberg.market, featuring a new gTLD, was fake. And so was the report. The fake website was a near-identical replica of Bloomberg’s site, and even used Bloomberg reporter Stephen Morris’s byline. OpenOutcrier, a Twitter account that bills itself as a destination for “Real-time stock & option trading headlines, breaking news, rumors and strategy” was the first to post about the report, although Bloomberg employees were quick to point out it was fake.

Most discussions about new gTLDs causing problems for brand owners is preventative such as with the .SUCKS and .PORN domains. This incident is a good example of a new gTLD causing the damage brand owners are trying to prevent in those other cases. As a brand owner you should make sure to not only use these new gTLDs as a tool for branding but remain aware of the release of new gTLDs to proactively register relevant domains and/or monitor for infringement like this. There are a number of free monitoring tools like Google Alerts or Talkwalker that you can use to monitor use of your brand name.  And you can see which new gTLDs have launched and when so you can remain up to date on gTLDs that you should register from a branding perspective and/or from a brand protection perspective.

As a result of this false story, Twitter shares shot up, only to fall back down when Twitter corrected . It’s not clear who was behind the faux story. With all that’s going on with Twitter, including the CEO being replaced by co-founder Jack Dorsey earlier this month, this incident was believable.  This could have caused more damage to company finances, reputation, and consumer trust. Don’t let your brand be next! Fraudsters are very savvy as you can see.

Should You Trademark Your Website?

It is extremely important for companies to protect their intellectual property. Developing a comprehensive intellectual property plan is essential to protecting your investment and protecting your consumers from confusion.  Trademarking your brand names, slogans and company name as well as copyrighting blog content, original imagery, and other original works of authorship are commonly know areas of focus for companies and entrepreneurs.  You want to be in control of your brand, your content and your creations.

Now, according to one federal court, companies can use trademark law to protect the unique look and feel of their websites from imitators. As a result of this ruling, companies should consider registering their websites as trademarks with the U.S. Patent and Trademark Office (the “USPTO”).

The U.S. District Court for the Northern District of California recently ruled in Ingrid & Isabel, Inc. v. Baby Be Mine, LLC, No. 13-01806 (N.D. Cal. Oct. 1, 2014) that the look and feel of a website used to market and sell products and services can constitute protectable trade dress under Section 43 of the Lanham Act. See 15 U.S.C. § 1125(a) (2012). Trade dress, a derivative of trademark law, protects the total image of a business or product, including the arrangement of identifying features such as graphics, packaging, designs, shapes, colors, textures, and décor.

This is an important development for companies seeking to protect their brand online. Your website is an important part of your brand as a company. It is often a customer’s first impression and point of sale.  Previous case-law suggested that a website could constitute protectable trade dress only if the website itself was the product. See Conference Archives, Inc. v. Sound Images, Inc., No. 06-00076, 2010 WL 1626072 (W.D. Pa. Mar. 31, 2010) The Ingrid & Isabel case provides an opportunity to expand those protections. This decision is reminiscent of the USPTO allowing Apple, Inc. to register a trademark for the design and layout of its unique retail stores. Your website is in effect your online store. This is a great example of the law starting to catch up with the times. Companies seeking to take advantage of this protection must make sure their website is 1)distinctive or has acquired secondary meaning and is 2) nonfunctional.RegisteredTM

  1. The court noted that the “Supreme Court has held that ‘design, like color is not inherently distinctive’ [citing a case involving Wal-Mart.]  Given the conceptual similarity between ‘look and feel’ and ‘design,’ Wal-Mart suggests that Plaintiff must show that its website‘s ‘look and feel’ is distinctive through its secondary meaning.” This eludes to the fact that the design of a website is not “inherently” distinct. You want to secure these protections before someone seeks to copy your website. However, per previous case-law  “secondary meaning may be inferred from evidence of deliberate copying of the trade dress…” Therefore, if you can show that your competitor deliberately copied your website, that will help to support your claim for acquired distinctiveness.
  2. Functional elements cannot be protected as trade dress. However, according to the court in Ingrid & Isabel “the placement and arrangement of functional elements can produce a non-functional aesthetic whole.”

This is also an important decision from a cybersecurity perspective. Most consumers are lured into phishing and other fraud scams when malicious actors mimic the look and feel of a brand’s website. Armed with a similar site they can lure unsuspecting consumers to insert personally identifiable information and financial data into their fake site. This can result in identity theft and financial loss. This is another tool in a trademark owner or company’s arsenal to combat fraud and protect their customers.

If your website is distinct, talk to an attorney about protecting it. This is an important consideration and should be part of developing a comprehensive intellectual property plan.

Trade dress protection has existed for decades, but its usefulness for websites and other Internet-based applications has been limited. It will be interesting to see how courts continue to apply the law to websites, mobile apps, and other non-traditional mediums.

Note that the court didn’t determine the ultimate outcome of this case; that’s still in dispute. This ruling merely allowed Ingrid & Isabel’s claim on this point to proceed to trial.

Internet Law & Security Updates

So much is happening online that it can be hard to keep up. I have compiled some of the most recent events in Social Media, Internet law & Cybersecurity. Know how these changes affect your privacy and other rights. If you have any questions leave them in the comments!

Social Media

Comments on social media considered and Facebook “Likes” enjoy federal protection. On August 25, the National Labor Relations Board found in Three D, LLC, d/b/a Triple Play Sports Bar and Grille v. Sanzone, Case No. 34-CA-012915, and Three D, LLC, d/b/a Triple Play Sports Bar and Grille v. Spinella, Case No. 34-CA-012926, that an employer had violated federal labor law by terminating an employee who had “liked” a former co-worker’s negative comment about the employer posted on Facebook.  The Board also ruled that the employer violated the National Labor Relations Act (the “Act”) by firing another employee for posting an expletive-laced comment about the employer in response to the former co-worker’s comment, and it found that the employer’s “Internet/Blogging” policy banning “inappropriate discussions” regarding the company unlawfully chilled employees’ exercise of their right to engage in protected, concerted activity under the Act.

BYOD

Reimburse employees for wireless service. A recent California ruling that requires companies to reimburse employees for wireless serviceAlthough the case raised more questions than it answered about what level of reimbursement is required, it seems clear that companies will bear a larger portion of the cost of BYOD programs than they had previously borne.

Security 
According to the New York Times, when one adds the compromised records in Target, PF Chang’s, Neiman Marcus, Sally Beauty, Michaels, UPS and others, the number of affected customers amounts to more than one-third of the U.S. population.

Home Depot the latest victim of security breach. Krebs has reported that it appears that two large dumps of purloined credit card numbers have made an appearance on the black market and that those numbers may have originated at Home Depot locations. Krebs’ reporting is here. This latest incident raises yet another round of concerns about the malware known as “Backoff” and the potential widespread effect on retailers. Home Depot has been hit with a class action lawsuit stemming from a suspected data breach at the home improvement retailer 

Using your cellphone’s gps to stay ahead of fraudsters. In a new effort to use technology to foil credit-card fraud, a company called BillGuard is testing a system that would monitor the precise whereabouts of mobile devices to detect possible payment issues. The tech firm is tracking mobile-phone locations in an attempt to stay one step ahead of fraudsters. Because smartphones are almost always near their owners, the technology would register and flag those occasions when a phone is not near the owner’s credit card. The technology would only be used with the consumer’s consent.

Healthcare.gov Server Hacked.The Department of Health and Human Services disclosed on Sept. 4 that malware had been uploaded on the Obamacare test server back in July. HHS officials say the malware was designed to launch a distributed-denial-of-service attack against other websites when activated and not designed to exfiltrate personally identifiable information. No consumer data was exposed in the incident, officials say (see HealthCare.Gov Server Hacked).

Apple plans to add safeguards to help address security vulnerabilities exploited by celebrity-photo hackers. The proposed changes include alerting users – using both e-mails and push notifications to devices – every time someone:

  • Changes an account password;
  • Uses a new device to log into an account;
  • Restores an iCloud backup to a new device.

After receiving a related alert, the user can immediately change their account password, or file a report of a suspected security breach with Apple. The company has yet to detail how exactly it will respond to those reports.

Privacy

Magazines in Michigan cannot share your personal information. The Michigan’s Video Rental Privacy Act limits the ability of companies to disclose information regarding customers’ video rental activities. In a case filed by a consumer who alleged that a magazine company had improperly disclosed her personal information, along with information about the magazines to which she subscribed, the U.S. District Court for the Eastern District of Michigan recently held that the law does in fact apply to magazines. The court noted that the statute is directed to companies “engaged in the business of selling at retail, renting, or lending books or other written materials, sound recordings, or video recordings,” and that magazines constitute “other written materials.”