Attorney Evan Brown

May 10, 2023 Cybersquatting

The use of AI in the domain name industry

Artificial intelligence has important uses in the domain name industry. With the use of AI, domain name registration, management, and valuation have been made more efficient and accurate. Here are some specific ways AI is affecting domain names:

Domain name suggestion and search optimization: AI-powered domain name generators can suggest relevant and available domain names based on specific keywords, making the search process easier and faster for businesses and individuals. Additionally, AI algorithms can optimize search results based on user behavior and preferences, making it easier for potential customers to find the right domain name for their needs.

Domain name valuation: AI algorithms can analyze and evaluate domain names based on various factors such as age, traffic, and backlinks, among others. This information is valuable for domain name investors and businesses looking to acquire domain names that align with their branding strategies.

Domain name security: AI-powered security tools can detect and prevent domain name fraud and phishing attacks. These tools can identify suspicious behavior, such as attempts to hijack a domain name, and alert domain name owners and security teams to take necessary actions.

Domain name portfolio management: AI algorithms can help businesses and individuals manage their domain name portfolios more efficiently by providing insights on which domain names to renew, which to drop, and which to acquire. This information can help businesses save money and optimize their domain name strategies.

AI is transforming the domain name industry by making it more efficient, secure, and cost-effective. Domain name registrars, investors, and businesses can leverage AI-powered tools to find, evaluate, and manage domain names more effectively, making the process easier and faster for all involved. We can expect even more innovations in the domain name industry in the years to come.

April 16, 2023 Artificial Intelligence

Five legal issues around using AI in a branding strategy

AI branding strategy

The ability of AI to gather, analyze, and interpret large sets of data can lead to invaluable insights and efficiencies. But as businesses increasingly rely on AI to develop and execute branding strategies, they must be aware of the potential legal issues that can arise. Here are five issues to consider:

Data Protection and Privacy Laws: AI systems often require vast amounts of data to operate effectively, much of which may be personal data collected from customers. This brings into play data protection and privacy laws, such as the General Data Protection Regulation (GDPR) in the European Union and the California Consumer Privacy Act (CCPA) in the United States. Non-compliance with these laws can lead to substantial fines and reputational damage. So businesses must seek to ensure that their use of AI complies with all applicable data protection and privacy laws.

Intellectual Property Rights: AI systems can generate content, designs, or even brand names. But who owns the rights to this AI-generated output? This is a complex and evolving area of law, with different jurisdictions taking different approaches. Businesses need to remember to consider intellectual property issues, both in the context of protecting their own rights and not infringing upon the rights of others.

Bias and Discrimination: AI systems learn from the data on which they are trained. If this data contains biases, the AI system can amplify these biases, leading to potentially discriminatory outcomes. This not only has ethical implications but also legal ones. In many jurisdictions, businesses can be held liable for discriminatory practices, even if unintentional. Businesses should ensure their AI systems are trained on diverse and representative data sets and regularly audited for bias.

Transparency and Explainability: Many jurisdictions are considering regulations that require AI systems to be transparent and explainable. This means that businesses must be able to explain how their AI systems make decisions. If a customer feels that it has been unfairly treated by an AI system, the business may need to justify the AI’s decision-making process. Compliance with these requirements can be challenging, particularly with complex AI systems.

Contractual Obligations and Liability: When businesses use third-party AI systems, it is crucial to clearly understand and define who is responsible if something goes wrong. This includes potential breaches of data protection laws, intellectual property infringement, and any harm caused by the AI system. Businesses should ensure their contracts with AI vendors clearly outline the responsibilities and liabilities of each party.

While AI presents numerous opportunities for enhancing a branding strategy, it also introduces a range of legal considerations. Businesses must navigate these potential legal pitfalls carefully so that they can leverage the power of AI while minimizing legal risk.

March 17, 2023 Contracts, Trademarks

The power of publicity and trademark use provisions in legal agreements

publicity agreement

In today’s brand-conscious marketplace, legal agreements between businesses often contain clauses allowing for publicity of the agreement itself and use of each other’s trademarks. This practice of mutual brand promotion can lend credibility to the involved parties and also serve as a powerful marketing strategy.

Understanding Publicity and Trademark Use Provisions

Publicity provisions in a legal agreement permit the parties involved to disclose specific details about their agreement to third parties. This could involve a simple announcement about the partnership or a more detailed disclosure about the agreement’s purpose and scope.

Trademark use provisions allow parties to use each other’s trademarks, logos, or brand names. This could be in marketing materials, on products, or in other forms of communication such as websites and social media content.

Why Include Publicity and Trademark Use Provisions?

While the specifics can vary, there are several general reasons why parties might wish to include these provisions:

Brand Awareness: Such provisions can help increase brand visibility and recognition, particularly when partnering with a well-known or highly respected company.
Credibility and Trust: The ability to publicize a partnership or to use a trusted brand’s trademark can lend credibility and foster trust among customers and stakeholders.
Market Penetration: For companies looking to break into new markets, a strategic partnership with a well-known brand can offer a significant advantage.

Key Considerations

Before including these provisions in an agreement, the parties should consider several key points:

Scope of Use: The agreement should clearly define what aspects of the agreement can be publicized and how each party’s trademarks can be used.
Quality Control: Trademark owners will want to ensure that their trademarks are used in a manner consistent with their own quality standards and brand identity.
Duration and Termination: It should be clear when the rights to publicity and trademark use begin and end, and what happens upon termination of the agreement.
Approval Process: Typically, any use of the other party’s trademark or any public disclosure of the agreement would require prior approval.
Indemnification: The agreement should include indemnification provisions to protect against any legal repercussions from the use of trademarks or publicity statements.

Publicity and trademark use provisions can be powerful tools in a legal agreement, offering enhanced brand visibility, credibility, and market penetration. However, they must be handled with care, considering the scope, quality control, duration, approval, and indemnification issues that may arise.

January 25, 2023 Contracts

Warranties in technology agreements: the basics

warranties technology agreements

Warranties in technology agreements can be a crucial component of a technology transaction. They provide a level of protection for both the service provider and the customer, ensuring that the services being provided meet certain standards and that any issues that may arise will be addressed in a timely and satisfactory manner.

There are two main types of warranties that are typically included in technology services agreements: express warranties and implied warranties. Express warranties are those that are explicitly stated in the agreement, while implied warranties are those that are assumed to be in place even if they are not explicitly stated.

Express warranties can include things like a guarantee that the services provided will meet certain performance standards or that certain features will be available. For example, a service provider may include a warranty that their software will have a certain uptime percentage or that their hardware will be free from defects.

Implied warranties, on the other hand, are more general and are assumed to be in place even if they are not explicitly stated. These can include things like a warranty of merchantability (meaning that the services will do what they purport to do) and a warranty of fitness for a particular purpose (meaning that the services provided will meet the specific needs of the customer).

It’s important to note that warranties can be given limitations. A service provider may disclaim implied warranties. Warranties may have time limits, meaning that they will only be in effect for a certain period of time after the services are provided. And a contract can provide that certain remedies (e.g., repair or replacement) serve as the exclusive remedy for the breach of a warranty.

Warranties are an important aspect of technology services agreements and provide a level of protection for both the service provider and the customer. Knowing the types of warranties that are typically included and understanding the scope of the warranties and any limitations or exclusions that may apply is crucial when reviewing and signing a technology services agreement.

Evan Brown is a technology and intellectual property attorney in Chicago. Follow him on Twitter at @internetcases.

January 23, 2023 Copyright

Do you have to register your copyright?

When it comes to protecting your creative work, one question that often comes up is whether you need to register your copyright. The short answer is that you don’t have to, but it’s generally a good idea to do so.

As soon as you create a work and fix it in a tangible form, such as by writing it down or recording it, you automatically have copyright protection. This means that you have exclusive rights to reproduce, distribute, perform, and display your work, and to create derivative works based on it. However, simply having copyright protection doesn’t necessarily give you the tools you need to enforce it.

That’s where copyright registration comes in. By registering your work with the Copyright Office in the United States (or a similar organization in other countries), you gain several important benefits. One of the most significant is the ability to sue for infringement in federal court. If someone is using your work without your permission and you haven’t registered your copyright, the court will not hear your case. But if you have registered your copyright within a certain time period, you can pursue your case and, also seek statutory damages and attorneys’ fees. These can be substantial, even if you can’t prove that you actually suffered any damages.

Another benefit of registration is that it can be used as evidence of the validity of your copyright in court. For example, if someone is accused of infringing your copyright and they claim that your work is not original or that you don’t own the rights to it, having a registration certificate can help to prove that your work is valid and that you are the rightful copyright holder.

In summary, while copyright registration is not mandatory, it’s a good idea to register your work because it provides a means to enforce the rights of copyright holders if someone is using it without permission and also can be used as evidence in court if any infringement claim arises.

Evan Brown is a technology and intellectual property attorney in Chicago. Follow him on Twitter at @internetcases.

January 19, 2023 Contracts

Why are API access agreements important?

Twitter has been in the news lately for what some seem to imply has been a problematic termination of third-party developers from its platform. This is a good occasion to talk about API access agreements in general, what they should cover, and why they are important.

An API (Application Programming Interface) access agreement is a legal document that outlines the terms and conditions under which a third-party developer can access and use an API. These agreements are important because they ensure that the API owner maintains control over their system and that the third-party developer understands and agrees to the terms and conditions of use.

System security and stability

One of the key provisions in an API access agreement relates to security. As APIs are used to access sensitive data and perform critical functions, it is essential that the API is protected from unauthorized access and misuse. The API owner should set strict security requirements for the third-party developer, such as data encryption and authentication protocols, to ensure that the API is used in a secure manner. The API owner may also wish to set limits on how often calls can be made to the API, so that the system is not overloaded or otherwise subject to diminished performance.

Intellectual property protection

Another key provision in an API access agreement relates to copyright. The API owner should have the right to control the use of their API, including the right to limit the third-party developer’s use of the API as needed to protect intellectual property rights. The API owner should also ensure that the third-party developer agrees not to copy, distribute, or otherwise use the API in a manner that is outside of an agreed scope.

These are contracts

API access agreements are contracts, and as such, they are legally binding. The API owner must be able to maintain control of its system for the system to function properly. This means that the API owner should have the right to revoke access to the API if the third-party developer breaches the terms of the agreement or if the API is being used in a manner that is not in compliance with the agreement.

Avoiding problems with termination

When terminating access to an API, the provider can treat a third-party developer fairly by providing adequate notice and a clear explanation for the termination. The developer should also negotiate for a reasonable amount of time to transition to an alternative solution or to retrieve any data it has stored within the API. Additionally, the provider may wish to make a good faith effort to assist the developer in finding a suitable alternative solution. If the termination is due to a breach of the API access agreement, the provider may provide the developer with specific details about the breach and allow for an opportunity for the developer to cure the breach before terminating access. A developer should also consider trying to negotiate a provision that says it is entitled to compensation from the developer for any losses or damages incurred as a result of an improper termination. Overall, the provider should approach the termination process in a fair, transparent and reasonable manner, taking into account the developer’s business needs and interest.

API access agreements are an essential part of the API ecosystem. They help ensure that the API owner maintains control over its system, that the third-party developer understands and agrees to the terms and conditions of use, and that the API is used in a secure and compliant manner. It is important that the parties understand the key provisions in an API access agreement and seek to comply with them in order to use the API successfully.

Evan Brown is a technology and intellectual property attorney in Chicago. Follow him on Twitter at @internetcases.

January 18, 2023 Contracts, Licensing

Why are limitation of liability provisions important in technology agreements?

liability cap

Limitations of liability are an important aspect of any technology agreement, as they help to define and limit the amount of financial responsibility that each party in the agreement must accept in the event of a dispute or legal action.

Caps

One of the main limitations of liability in a technology agreement is the cap on the amount damages. This means that even if a party is found to be at fault in a dispute, the maximum amount of financial responsibility that it is willing to accept is limited to a specific dollar amount. For example, a technology company may agree to a cap on damages of $1 million in the event of a legal dispute. Or it could agree that the maximum amount it would have to pay would be whatever its insurance will cover. It is important to note that while damages caps can provide predictability and stability in terms of financial exposure, they can also limit the recovery of a party that has suffered significant losses. So they should be negotiated thoughtfully.

Exclusions

Another limitation of liability in a technology agreement is the exclusion of certain types of damages. This means that even if a party is found to be at fault, they are not responsible for certain types of losses or damages. For example, a technology company may exclude consequential damages, such as lost profits or loss of business, in the event of a legal dispute.

Carveouts

Though a limitation of liability provision may call for a damages cap or an exclusion of the types of damages available, parties recognize that in certain situations, damages should not be limited. For example, a breach of confidentiality by one party may be particularly harmful to the other party, and thus it would be unfair to cap the amount of damages. Another example arises in the context of indemnification. If one party is obligated to pick up the tab because the other party got sued for what the indemnifying party did, then the indemnified party will want to make sure it is made whole, regardless of what the damages are. In situations such as these, the parties may negotiate a “carveout” from the damages cap or exclusion, and agree that if something occurs within a defined set of circumstances, the liability caps or exclusions will not apply.

Limitations on limitations

It is important to keep in mind that limitations of liability are subject to legal interpretation and may not be enforceable in all jurisdictions. They can be evaluated and interpreted by courts in different ways. Additionally, some courts may hold that a limitation of liability clause is unenforceable if it is found to be unconscionable or against public policy.

Tough negotiation

In many technology transactions, the limitation of liability provision is among the last remaining issues to negotiate. This fact underscores how important such provisions are in making a particular transaction palatable to a party. A particular vendor may not be willing to “bet the company” on a particular deal (i.e., would not want to risk everything if something goes wrong). So these sorts of provisions are useful in giving parties comfort to enter into a deal.

Evan Brown is a technology attorney in Chicago. Follow him on Twitter: @internetcases

January 17, 2023 Anonymity, Cryptocurrency

Cryptocurrency scam victim can seek to identify Coinbase, Binance and Gemini users

A federal court in Wisconsin allowed a cryptocurrency scam victim to try to find out who stole his cryptocurrency. It found that good cause existed to allow the plaintiff-victim to send subpoenas to Coinbase, Binance and Gemini.

cryptocurrency scam victim

The Federal Rules of Civil Procedure state that a party cannot seek discovery “from any source before the parties have conferred as required by Rule 26(f).” So plaintiff was required to get authorization from the court before seeking information from the various cryptocurrency exchange platforms onto which he believed his assets had been placed. He filed a motion requesting such authorization.

The judge first observed that various trial courts within the same federal circuit (this case arose in Wisconsin federal court, which is in the Seventh Circuit) have applied different tests when deciding whether “expedited discovery” is appropriate. One such test requires, among other things, that the party seeking discovery show that it will suffer irreparable harm if the request is not granted. The other test – the good cause standard – allows expedited discovery “when the need for [such discovery], in consideration with the administration of justice, outweighs the prejudice to the responding party.”

In this case, the court applied the good cause standard. But the court did not allow plaintiff to send subpoenas concerning all of the information he had asserted should be discoverable. For example, plaintiff asked the court for permission to seek the Doe defendant’s social security number, as well as transaction logs and correspondence. The court found such requests “go far beyond seeking the defendants’ identifying information” and would instead be the types of discovery requests the court might expect plaintiff to make once the defendants have been identified and plaintiff is seeking discovery as to his substantive allegations. Instead, the court permitted expedited discovery for the sole purpose of obtaining information to identify the John Doe defendants. This information included only the name, street address, telephone number and e-mail address of each John Doe.

The court further ordered that Coinbase, Binance and Gemini had to provide a copy of the subpoena to each John Doe and any other affected user as soon as possible after service of the subpoena. The court’s order also provided that each of the platforms and any affected user must have 14 days from the date of service of the subpoena to object to the subpoena under Federal Rule of Civil Procedure 45(d)(2)(B). The platforms were ordered not to disclose any John Doe’s identifying information, or such information for any other affected user, during that fourteen-day period (unless or until the court may otherwise order). The platforms were also ordered to preserve any material responsive to the subpoena for a period of no less than 90 days to allow the plaintiff to file a motion to compel.

Wuluvarana v. Does 1-3, 2023 WL 183874 (E.D. Wisconsin, January 14, 2023)

Evan Brown is a technology and intellectual property attorney in Chicago. Follow him on Twitter at @internetcases.

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January 16, 2023 Contracts

What are audit provisions in a technology contract?

audit provision

An audit provision in a technology contract is a clause that allows for one party to inspect and perhaps copy certain business records and other information of the other party. Often an audit provision authorizes a party that owns licensed technology or software (the provider or licensor) to periodically inspect and audit the customer’s use of the technology or software. These types of provisions help ensure that the customer is using the technology or software in accordance with the terms of the agreement and that it is not infringing or otherwise misusing the technology or software. They can also be used to ensure that the customer is paying the appropriate license fees or royalties.

One often sees audit provisions in reseller agreements and revenue sharing agreements, to give the right of one party to inspect records that confirm it is being paid in accordance with the terms of the agreement. Since commissions are often calculated as a percentage of revenue, a referral partner may want to see the underlying records supporting the amounts the referral partner is being paid.

The audit provision typically outlines the procedures for the audit, such as the frequency of the audits (often expressed as “no more often than x times per calendar year”), who may conduct the audits (e.g., designees of the auditing party), and what information must be made available for review during the audit. It may also outline the rights and responsibilities of both parties during the audit process, including any limitations on the scope of the audit and the handling of any confidential information that is revealed during the audit.

An audit provision in a technology contract may provide that if the audit uncovers underpayment by the audited party (perhaps by at least a certain percentage) then the audited party will be responsible not only for the amount of the underpayment, but also for the costs incurred by the auditing party in conducting the audit.

Overall, audit provisions are an important aspect of technology agreements and play a vital role in protecting the interests of both parties involved. It is important for both parties to understand the audit provisions in the agreement and to comply with them fully in order to avoid any potential legal disputes.

Evan Brown is a Chicago attorney helping businesses negotiate and draft technology services and development contracts. He also handles many other issues involving the internet, copyright and trademarks, domain names and new media. Call him at (630) 362-7237 or email ebrown@internetcases.com. Follow him on Twitter: @internetcases

January 11, 2023 Contracts, Licensing

Why are indemnification provisions important in technology contracts?

vicarious liability copyright

Indemnification provisions in technology agreements play a crucial role in protecting the parties involved in a technology transaction. These provisions are often included in agreements among technology vendors, customers, software developers, and other related parties to shift the risk of losses and legal liabilities from one party to another.

Picking up the tab

Indemnification is a legal concept that involves one party (the indemnitor) agreeing to compensate the other party (the indemnitee) for any losses or damages that may occur as a result of a specific event or occurrence. Similarly, a provision of this sort may provide that one party will “defend” the other party by retaining counsel and paying the costs of defense in court, as those costs are incurred. In technology agreements, indemnification provisions are often used to shift the risk of losses or damages that may result from a party’s breach of contract or negligence. Customers will often seek to insist that the vendor indemnify the customer in the event a third party files a lawsuit against the customer because the technology infringes that third party’s intellectual property rights.

The main purpose of indemnification provisions in technology agreements is to protect the parties involved from potential financial losses, legal liabilities, and other costs associated with legal disputes. For example, a contract may provide that if a software developer breaches a contract and causes a loss to the client, the indemnification provision would require the developer to compensate the client for any damages.

Key elements

Indemnification provisions in technology agreements typically contain several key elements, including the types of losses or damages that will be covered, the parties that are responsible for indemnifying the other party, and the time frame for indemnification to take place. It also often covers the notification requirements, the documentation and information that should be provided in case of losses or damages, and the limitation of liability.

Another key aspect of indemnification provisions is that they are often mutual, meaning that both parties are responsible for indemnifying each other in certain situations. This can help to ensure that both parties are protected in the event of a legal dispute, and it also helps to create a balance of risk between the parties.

Why bother?

Indemnification provisions in technology agreements play a vital role in protecting the parties involved from financial losses, legal liabilities, and other costs associated with legal disputes. It’s important for both parties to understand the concept of indemnification, the purpose of these provisions, and how they are typically used in technology agreements.

Evan Brown is a technology and intellectual property attorney in Chicago. Follow him on Twitter at @internetcases.