Attorney Evan Brown

April 15, 2024 Cybersquatting

Does renewing a domain name count as “registering” a domain name under the ACPA?

ACPA

The Anticybersquatting Consumer Protection Act (“ACPA”) is a federal law – part of the Lanham Act that deals with trademarks and unfair competition. It says that a person can be liable if he or she registers a domain name that contains another’s distinctive trademark with a bad faith intent to profit from that mark.

One issue that has arisen over the years is whether registration that can give rise to liability means only the first time the domain name is registered, or whether it applies to the re-registration, e.g., each year when the registration is up for renewal with the registrar. See this case from earlier this year where the court held that renewal was not registration.

The various federal circuits are split over the issue. At least the the Third, Fourth, and Eleventh Circuits have all concluded that the ordinary meaning of the word “registers” necessarily includes both the first registration and any subsequent re-registrations. The Ninth Circuit has held that Congress meant “registration” to refer only to the initial registration.

The Second Circuit does not appear to have weighed in on the question. But a recent district court sitting in the Second Circuit sided with the “re-registration is registration” take from the Third, Fourth and Eleventh Circuits.

In the case of We the Protesters, Inc. v. Sinyangwe, 2024 WL 1195417 (S.D.N.Y., March 20, 2024), counter-defendant registered the disputed domain name in 2015. The issue was whether the re-registration of the disputed domain name in 2023 was a registration of a distinctive mark done in bad faith. This passage of time was important because it gave the arguably descriptive mark MAPPING POLICE VIOLENCE enough time to become distinctive.

Concerning the word “registers” in the ACPA, the court applied its ordinary meaning, noting that it was not the province of the court to add words to statutes that Congress enacts. “Had Congress wished to restrict the word ‘registration’ as used in the ACPA to initial registrations, it surely knew how to do so.”

We the Protesters, Inc. v. Sinyangwe, 2024 WL 1195417 (S.D.N.Y., March 20, 2024)

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April 11, 2024 Defamation, Section 230

Section 230 protected President Trump from defamation liability

TRUMP 230

Plaintiff sued the Trump campaign, some of the President’s advisors and several conservative media outlets asserting claims for defamation. Plaintiff – an employee of voting systems maker Dominion – claimed defendants slandered him by saying plaintiff had said he was going to make sure Trump would not win the 2020 election.

The Trump campaign had argued that two retweets – one by Donald Trump and another by his son Eric – could not form the basis for liability because Section 230 shielded the two from liability. The lower court rejected the Section 230 argument. But on review, the Colorado Court of Appeals held that Section 230 immunity should apply to these retweets.

Section 230 shields users of interactive computer services from liability arising from information provided by third parties. The facts of the case showed that both President Trump and Eric Trump simply retweeted a Gateway Pundit article and an One America Network article without adding any new defamatory content.

The court specifically rejected plaintiff’s argument that Section 230 immunity should not apply because of the Trump defendants’ knowledge that the retweeted information was defamatory. The court looked to a broader consensus of courts that hold such an idea is not woven into Section 230 imm.

The case supports the proposition that defendants could repost verbatim content that someone else generated – even with knowledge that the content is defamatory – and not face liability.

Coomer v. Donald J. Trump for President, Inc., — P.3d —, 2024 WL 1560462 (Colo. Ct. App. April 11, 2024)

April 10, 2024 Artificial Intelligence, Trademarks

Key Takeaways From the USPTO’s Guidance on AI Use

uspto ai

On April 10, 2024, the United States Patent and Trademark Office (“USPTO”) issued guidance to attorneys about using AI in matters before the USPTO. While there are no new rules implemented to address the use of AI, the guidance seeks to remind practitioners of the existing rules, inform of risks, and provide suggestions for mitigating those risks. The notice acknowledges that it is an effort to address AI considerations at the intersection of innovation, creativity and intellectual property, consistent with the President’s recent executive order that calls upon the federal government to enact and enforce protections against AI-related harms.

The guidance tends to address patent prosecution and examination more than trademark practice and prosecution, but there are still critically important ideas relevant to the practice of trademark law.

The USPTO takes a generally positive approach toward the use of AI, recognizing that tools using large language models can lower the barriers and costs for practicing before the USPTO and help practitioners serve clients better and more efficiently. But it recognizes potential downsides from misuse – some of which is not exclusive to intellectual property practice, e.g., using AI generated non-existent case citations in briefs filed before the USPTO and inadvertently disclosing confidential information via a prompt.

Key Reminders in the Guidance

The USPTO’s guidance reminds practitioners of some specific ways that they must adhere to USPTO rules and policies when using AI assistance in submissions – particularly because of the need for full, fair, and accurate disclosure and the protection of clients’ interests.

Candor and Good Faith: Practitioners involved in USPTO proceedings (including prosecution and matters such as oppositions and cancellation proceedings before the Trademark Trial and Appeal Board (TTAB)) are reminded of the duties of candor and good faith. This entails the disclosure of all material information known to be relevant to a matter. Though the guidance is patent-heavy in its examples (e.g., discussing communications with patent examiners), it is not limited to patent prosecution but applies to trademark prosecution as well. The guidance details the broader duty of candor and good faith, which prohibits fraudulent conduct and emphasizes the integrity of USPTO proceedings and the reliability of registration certificates issued.

Signature Requirements: The guidance outlines the signature requirement for correspondence with the USPTO, ensuring that documents drafted with AI assistance are reviewed and believed to be true by the signer.

Confidentiality: The confidentiality of client information is of key importance, with practitioners being required to prevent unauthorized disclosure, which could be exacerbated by the use of AI in drafting applications or conducting clearance searches.

International Practice: Foreign filing and compliance with export regulations are also highlighted, especially in the context of using AI for drafting applications or doing clearance searches. Again, while the posture in the guidance tends to be patent heavy, the guidance is relevant to trademark practitioners working with foreign associates and otherwise seeking protection of marks in other countries. Practitioners are reminded of their responsibilities to prevent improper data export.

USPTO Electronic Systems: The guidance further addresses the use of USPTO electronic systems, emphasizing that access is governed by terms and conditions to prevent unauthorized actions.

Staying Up-to-date: The guidance reiterates the duties owed to clients, including competent and diligent representation, stressing the need for practitioners to stay informed about the technologies they use in representing clients, including AI tools.

More Practical Guidance for Use of Tools

The guidance next moves to a discussion of particular use of AI tools in light of the nature of the practice and the rules of which readers have been reminded. Key takeaways in this second half of the guidance include the following:

Text creation:

Word processing tools have evolved to incorporate generative AI capabilities, enabling the automation of complex tasks such as responding to office actions. While the use of such AI-enhanced tools in preparing documents for submission to the USPTO is not prohibited or subject to mandatory disclosure, users are reminded to adhere to USPTO policies and their duties of candor and good faith towards the USPTO and their clients when employing these technologies.

Likely motivated by court cases that have gotten a lot of attention because lawyers used ChatGPT to generate fake case cites, the USPTO addressed the importance of human-review of AI generated content. All USPTO submissions, regardless of AI involvement in their drafting, must be signed by the presenting party, who attests to the truthfulness of the content and the adequacy of their inquiry into its accuracy. Human review is crucial to uphold the duty of candor and good faith, requiring the correction of any errors or omissions before submission. While there is no general duty to disclose AI’s use in drafting unless specifically asked, practitioners must ensure their submissions are legally sound and factually accurate and consult with their clients about the representation methods used.

More specifically, submissions to the TTAB and trademark applications that utilize AI tools require meticulous review to ensure accuracy and compliance with the applicable rules. This is vital for all documents, including evidence for trademark applications, responses to office actions, and legal briefs, to ensure they reflect genuine marketplace usage and are supported by factual evidence. Special attention must be given to avoid the inclusion of AI-generated specimens or evidence that misrepresents actual use or existence in commerce. Materials produced by AI that distort facts, include irrelevant content, or are unduly repetitive risk being deemed as submitted with improper intent, potentially leading to unnecessary delays or increased costs in the proceedings.

Filling out Forms:

AI tools can enhance the efficiency of filing documents with the USPTO by automating tasks such as form completion and document uploads. But users must ensure their use aligns with USPTO rules, particularly regarding signatures, which must be made by a person and not delegated to AI. Users are reminded that USPTO.gov accounts are limited to use by natural persons. AI systems cannot hold such accounts, emphasizing the importance of human oversight in submissions to ensure adherence to USPTO regulations and policies.

Automated Access to USPTO IT Systems:

The guidance notes that when utilizing AI tools to interact with USPTO IT systems, it is crucial to adhere to legal and regulatory requirements, ensuring authorized use only. Users must have proper authorization, such as being an applicant, registrant, or practitioner, to file documents or access information. AI systems cannot be considered “users” and thus are ineligible for USPTO.gov accounts. Individuals employing AI assistance must ensure the tool does not overstep access permissions, risking potential revocation of the applicable USPTO.gov account or face other legal risk for unauthorized access. Additionally, the USPTO advises against excessive data mining from USPTO databases with AI tools. The USPTO reminds readers that it provides bulk data products that could assist in these efforts.

April 9, 2024 Contracts

So-called “Mutual Non-Disclosure Agreement” only protected one party’s information

mutual NDA

Eastern sued Herbalife for breach of the “Mutual Non-Disclosure Agreement” into which the parties had entered. Eastern claimed Herbalife breached the agreement by disclosing Eastern’s confidential information to a competitor. Herbalife moved for summary judgment on Eastern’s claim for breach of the NDA. The court granted the summary judgment motion.

Was there trickery in drafting?

The NDA in many respects read like an NDA that would bind both parties to protect the other party’s confidential information. Its title contained the word “mutual”. It referred to a “Disclosing Party” and a “Receiving Party”. And it defined “Confidential Information” not by referring to the parties by name, but by saying that Confidential Information was comprised of certain information that the Disclosing Party makes available to the Receiving Party. So on quick glance, one might think it bound both parties to protect the other’s information.

But one critical feature of the agreement was fatal to Eastern’s claim. The word “Disclosing Party” was defined to include only Herbalife.

But what about other parts of the agreement?

Eastern argued that the parties intended the NDA to be mutually binding by pointing to the title of the agreement, references to the obligations of the “Parties”, and discussion of the remedies section which discussed remedies to which a “non-breaching party” would be entitled. Eastern argued that these instances of language showed that a remedy for breach should not be considered as available only for Herbalife.

Plain definitions prevailed

The court rejected Eastern’s argument, looking at the plain language of the agreement and noting that the general references that Eastern emphasized did not “vitiate” the NDA’s express definitions of “Disclosing Party” and “Confidential Information”.

Herbalife Int’l of America, Inc. v. Eastern Computer Exchange Inc., 2024 WL 1158344 (C.D. Cal., March 18, 2024)

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April 8, 2024 Cybersquatting, Trademarks

Sprint puts an end to entrepreneurs’ efforts to revive NEXTEL brand

abandonment — This house is abandoned but the NEXTEL mark is not.

Plaintiff Sprint (owner of the NEXTEL brand) sued defendant business owners, asserting claims for trademark infringement, cybersquatting and counterfeiting. Beginning in 2016, defendants – apparently believing that Sprint had abandoned the NEXTEL mark – began selling cheap cell phones branded as Nextel devices, and operating websites lauding the brand’s “revival”.

The question of defendants’ liability for infringement of the NEXTEL word mark went to a jury, which found in favor of plaintiff. The jury rejected defendants’ argument that Sprint had abandoned the NEXTEL mark.

Defendants sought review of the jury’s finding of no abandonment with the Eleventh Circuit Court of Appeals. On appeal, the court affirmed the lower court’s judgment.

The court examined how abandonment is a defense in trademark infringement cases, requiring discontinuation of a mark’s use with no intent to resume. Trademarks must be used genuinely, and the Lanham Act provides that three years of nonuse is prima facie evidence of abandonment.

The court concluded that the evidence showed Sprint’s continuous use of the NEXTEL word mark. For the three year period that defendants claimed Sprint had not used the mark, Sprint had provided evidence that the mark was used on at least two products. This continuous use also undermined defendants’ arguments against the cybersquatting claim.

Sprint Communications, Inc. v. Calabrese, 2024 WL 1463416 (11th Cir., April 4, 2024)

April 3, 2024 Section 230

Section 230 and … Environmental Law?

section 230 environmental law

Here is a recent case that is interesting because the court applied Section 230 to a situation (as far as this author knows) in which Section 230 has not been applied before – the Clean Air Act.

The Clean Air Act makes it illegal for a person, including a company, “to manufacture or sell” a “part or component intended for use with … any motor vehicle” if “a principal effect” of the part or component is to “defeat” emissions controls “and where the person knows or should know” that it is “put to such use.” 42 U.S.C. § 7522(a)(3)(B).

And we know that our old friend Section 230 – a part of the Communications Decency Act (47 U.S.C. § 230(c)(1)) – commands that “[n]o provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider.” This works to establish broad federal immunity to any cause of action that would make service providers liable for information originating with a third-party user of the service.

Defendants’ product was used to defeat emissions testing

In the case of United States v. EzLynk Sezc, 2024 WL 1349224 (S.D.N.Y., March 28, 2024), the federal government filed suit over the sale of the “EZ Lynk System.” The system was comprised of three parts – hardware that would connect to a car to reprogram its software used in emissions testing, a cloud based service where users could upload “delete tunes” – software that was used to defeat the emissions control software, and a mobile app to coordinate the hardware and the cloud based software.

Defendants moved to dismiss, arguing that it was immune under Section 230. The court granted the motion.

Section 230 immunity

The court noted that to satisfy the test for immunity: (1) the defendant must be a provider or user of an interactive computer service; (2) the claim must be based on information provided by another information content provider; and (3) “the claim would treat the defendant as the publisher or speaker of that information. It found that all three of these elements were met.

The system was an interactive computer service

On the question of whether defendants provided an interactive computer service, the court rejected the government’s suggestion that Section 230’s immunity was limited to social media platforms. “Software is information, albeit presented in code. The Complaint alleges the EZ Lynk Cloud is a platform on which people exchange information in the form of software. . . . Thus, according to the government’s own account of the nature of an interactive computer service, the Complaint alleges that the EZ Lynk Defendants provide an interactive computer service.”

Claim based on information provided by third parties, of which defendants were not the speaker

Seeking to avoid Section 230 immunity, the government sought to hold defendants liable for their own conduct. It claimed defendants were themselves information content providers who bore responsibility for the creation and installation of the delete tunes. But the court looked to the language of the complaint itself that expressly alleged that the delete tunes were created by third party companies and individuals. And the court found it could not infer from the allegations in the complaint that defendants collaborated with the third party software providers who uploaded the delete tunes. The court likewise rejected the government’s assertions that defendants’ technical support online communications and social media activity contributed to any misconduct on the part of defendants.

United States v. EzLynk Sezc, 2024 WL 1349224 (S.D.N.Y., March 28, 2024)

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April 2, 2024 Cybersquatting, Trademarks, Unfair Competition

Redirecting URL was unlawful but did not cause damages

url redirect trademark

In the months leading up to the FDA shutting down plaintiff’s business, one of the co-owners of the business left and set up a competing enterprise. For a few weeks, the former co-owner set plaintiff’s domain name to forward to the new company’s website.

Plaintiff sued and the court held that redirecting the URL was a violation of the Lanham Act (the federal law relating to trademarks and unfair competition). But plaintiff was not entitled to any damages because it failed to show that the redirection caused any lost sales. During that time, 133 users who tried to access plaintiff’s website were redirected to the new company’s website, and of those 133 visitors, only two submitted inquiries and neither customer who submitted an inquiry placed an order.

ABH Nature’s Products, Inc. v. Supplement Manufacturing Partner, Inc., 2024 WL 13452228 (E.D.N.Y., March 29, 2024)

Can the owner of a company be personally liable for what the company does?

personally liable

One of the major benefits of forming a corporation or limited liability company is the shield from personal liability the business entity provides to its owners. But that shield does not protect against all of the company’s officers’ conduct.

In a recent trademark infringement case in federal court in California, a court evaluated whether a company’s officer could face liability for trademark infringement and cybersquatting. Plaintiff sued the company and the owner individually, asserting that that the owner should be personally liable because he controlled and was involved in all significant corporate decisions regarding the alleged infringement.

Citing to Facebook, Inc. v. Power Ventures, Inc., 844 F.3d 1058 (9th Cir. 2016), the court observed that a corporate officer can be personally liable when he or she is the “guiding spirit” behind the wrongful conduct, or the “central figure” in the challenged corporate activity.

In this case, the court declined to dismiss the individual defendant from the lawsuit. With respect to the alleged trademark infringement and cybersquatting, the court focused on the fact that the individual defendant:

was the founder and central figure of the company,
personally participated in all major business strategy, branding and marketing decisions and actions,
ran the company from his home,
was the only officer of the company and was simultaneously the CEO, CFO and Secretary,
promoted the company’s brand from his personal social media account, and
directly negotiated with the plaintiff’s founder to see whether the parties could “find a more peaceful resolution.”

Simply stated, the individual defendant was not merely a board member that “final say,” but was substantially involved in every aspect of the conduct of the business giving rise to the alleged intellectual property infringement.

Playground AI LLC v. Mighty Computing, Inc. et al., 2024 WL 1123214 (N.D. Cal., March 14, 2024)

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March 28, 2024 Privacy, Section 230

CCPA claim against Apple thrown out on Section 230 grounds

Plaintiffs sued Apple after downloading a malicious app from the App Store. The claims included violation of the Computer Fraud and Abuse Act (“CFAA”), the Electronic Communications Privacy Act (“ECPA”), and the California Consumer Privacy Act (“CCPA). (Alphabet soup, anyone?)

The lower court granted Apple’s motion to dismiss these claims. Plaintiffs sought review with the Ninth Circuit Court of Appeals. On appeal, the court held that the lower court properly applied Section 230 immunity to dismiss these claims.

What Section 230 does

Section 230 (47 U.S.C. § 230) instructs that “[n]o provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider.” A defendant is not liable if it can show that (1) it is a provider of “interactive computer services” as defined by the statute, (2) the claim relates to “information provided by another content provider,” and (3) the claim seeks to hold defendant liable as the “publisher or speaker” of that information.

Why the CFAA and ECPA claims were dismissed

In this case, concerning the CFAA and ECPA claims, the court looked to Barnes v. Yahoo!, Inc., 570 F.3d 1096 (9th Cir. 2009) and concluded that the lower court properly found Section 230 immunity to apply. The duty that plaintiffs alleged Apple violated derived from Apple’s status or conduct as a “publisher or speaker.” It found that the claims referred, as the basis for culpability, to Apple’s authorization, monitoring, or failure to remove the offending app from the App Store. “Because these are quintessential “publication decisions” under Barnes, 570 F.3d at 1105, liability is barred by section 230(c)(1).”

Section 230 knocked out CCPA claim too

The data privacy count included allegations that Apple violated duties to “implement reasonable security procedures and practices” to protect the personal information of App Store users, in violation of Cal. Civ. Code § 1798.100(e). The court said that it need not decide whether violations of such duties can be boiled down to publication activities in every instance or whether implementation of reasonable security policies and practices would always necessarily require an internet company to monitor third-party content. Citing to Lemmon v. Snap, Inc., 995 F.3d 1085 (9th Cir. 2021) the court found that in this case, at least, plaintiffs failed to plead adequately a theory of injury under CCPA that was “fully independent of [Apple’s] role in monitoring or publishing third-party content.”

Diep v. Apple, Inc., 2024 WL 1299995 (9th Cir. March 27, 2024)

March 27, 2024 Social Media

Negligence claim against Roblox for minors’ gambling moves forward

Plaintiffs sued defendant Roblox asserting various claims, including under RICO and California unfair competition law. Plaintiffs also claimed that Roblox was negligent by providing a system whereby minors were lured into online gambling.

Roblox moved to dismiss the negligence claim for failure to state a claim upon which relief may be granted. The court denied the motion to dismiss, allowing the negligence claim to move forward.

Roblox’s alleged involvement with online casinos

The gaming platform uses a virtual currency called “Robux” for transactions within its ecosystem. Users can purchase Robux for in-game enhancements and experiences created by developers, who can then convert their earned Robux into real money through Roblox. However, plaintiffs allege that online casinos accept Robux for gambling, thereby targeting minors. These casinos allegedly conduct sham transactions on Roblox to access a minor’s Robux, allowing the minors to gamble. When minors lose Robux in these casinos, the lost currency is converted back into cash, with Roblox allegedly facilitating these transactions and profiting from them. Plaintiffs claim Roblox is fully aware that its services are being exploited to enable illegal gambling activities involving minors in this way.

Why the negligence claim survived

The court observed that under California law, there is a fundamental obligation for entities to act with reasonable care to prevent foreseeable harm. Roblox argued that it was exempt from this duty. But the court rejected this argument, holding that that Roblox did indeed owe a duty to manage its platform responsibly to avoid harm, including by alerting parents about gambling risks.

Colvin v. Roblox Corporation, — F.Supp.3d —, 2024 WL 1268420 (N.D. Cal. March 26, 2024)

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