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Counsel, Head of IP, IT & Antitrust Practice, Spenser & Kauffmann
Associate of IP, IT & Antitrust Practice, Spenser & Kauffmann
E-Advertising vs Intellectual Property: A Continuous Tug of War
Nowadays business, regardless of as size, small and large companies, are directly relevant to the Internet. Some of them use the Internet as a platform for advertisement, the others use it as a trading platform to sell their products and services.
Every single day the range of tools and possibilities for Internet-promotion of business is becoming more and more expansive. In particular, among popular tools we can name contextual advertising (Google Ad— Words, Yandex.Direct), search promotion (SEO), social media marketing (SMM), meta tags, banner advertisement (pop-up, pop-under), hyperlinks (linking, framing) and others. All the e-promotion tools mentioned above have their functions and purposes.
However, not all companies use the above tools in good faith. In particular, they aim “to increase recognition” using the reputation of a well-known company and applying means of individualization and IP objects of other companies, causing harm. Thus, there are many cases of violation of trademarks (hereinafter — TM), artistic, musical, literary rights and rights for geographical indications as well as cases of misuse of commercial and trade names, etc.
Where on the Internet can Violated IP Rights be?
Trademark rights are often violated in the contextual advertisement within such popular services as Google AdWords and Yandex. Direct. A new business usually chooses the names of already promoted brands when launching contextual advertisement. Thus, when users search something they see the website of unfair advertisers but not “original” websites of well-known brand owners. Thus, international practice considers application of the trademark of another company as a key word for advertisement of the product as violation of customers’ rights. Such application may mislead the customer and cause him/her to have doubts regarding the real manufacturer of the product (cases Interflora v Marks & Spencer, Bergspechte v Günter Guni). Meanwhile, owners of the platforms may be held liable only if they neither removed nor restricted access to “forbidden” key words after they had identified infringement of the trademark (case Louis Vuitton v Google).
In addition, for the purposes of quick and cheap business marketing on the Internet, companies resort to the use of TM in the website structure, as meta tags. Thus, where the searched word coincides with the meta tags of the website, such website appears in the search results of the user, thereby increasing its search rating, which implies the profitability of the website as well. Accordingly, the dispute between Kraft Foods Holdings, Inc. v. Stuart Helm, who put the word “VelVeeda” as the meta tag of its website, may serve as an example of such usage. In turn, the word “VelVeeda” is almost identical to the “Velveeta” trademark of Kraft Foods. The court recognized such usage as the violation of Lanham Act by commencing dilution of the trademark and banned Stuart Helm from using the word “VelVeeda” as the meta tag.
Banner Advertisement (pop-up and popunder)
It is impossible not to mention banner advertisements (pop-up and popunder), which are well known to the ordinary user as annoying pop-ups and pictures, which often make it hard to “get” to the main content. In the vast majority of cases the infringement of IP rights happens where the TM is used as the keyword for the appearance of banner advertising. There are special services (Gator and Whenu.com) that analyze the search information of user and, accordingly to the requests of the user, show him an advertisement. For example, the user is looking for a Honda minibus but instead of this he gets the banner advertisement of the Dodge company with the same type of vehicle. Nevertheless, the courts are very scrupulous as to this category of cases, particularly in case of nonproving of damages caused to the company or non-proof of the use of the trademark as the search word for the banner advertisement, which misleads the users as to the possible connection between the claimant and its rival, the violation is deemed to be absent
(1-800 Contacts Inc. v. WhenU.com).
Hyperlinks (linking, hot linking, deep linking and framing)
Hyperlinks to other websites with the possibility to borrow one’s content (linking, hot linking, deep linking and framing) are more complicated e-marketing mechanisms of business. In particular, deep linking (outer connection) is used to place a hyperlink on the website, which leads to a page from another website, while bypassing the main (starting) page. A hot linking instrument provides the opportunity to include in the content of the website pictures or other content of one’s website. Framing involves the creation of the so-called window of one website (frame) within which the content of the other website is being shown.
In the case of GS Media v. Sanoma (Playboy publisher), the European Court of Justice held that the placement of links to photos from the Playboy magazine by the news resource is violation of copyright law.
In the case of Paramount Home Entertainment International Ltd & Ors v British Sky Broadcasting Ltd & Ors, which concerned framing in terms of e-commerce, the court stated that provision of access to films and TV shows through the in-built player is violation of copyright law.
In this regard, it should be noted that such cases are now quite rare in the national jurisdiction. Thus, the vast majority of “e-proceedings” disputes are the “domain” disputes or disputes concerning the infringement of IP rights on the Internet. Such disputes include the case of Citibank v. Sphere-Capital, dispute between Exxon Mobil Corporation v. Ember Ukraine and others. However, even now, when setting out the circumstances of the case, plaintiffs often claim that respondents violate their rights when they place the advertising on the Internet. In example, in Sorbex v. Sorbent, the plaintiff pointed to violations of the rights to the trademark used by the defendant on Internet banners.
How to Protect IP Rights on the Internet?
According to the aforementioned, it is deemed that rival companies are likely to resort to different means of business marketing on the Internet; however, such marketing is not always bona fide and legitimate. In this regard, in order to minimize or protect the company from possible IP infringements, companies or private entrepreneurs need to check whether all IP objects are properly registered and, therefore, protected.
In this way, the trademarks of companies shall be registered according to national and international procedure or the companies shall possess valid certificates. Trademarks can act as mere words, sentences, slogans, whether with drawings or not, pictures, or even melodies. In particular, if your ad contains some unique IP objects (for example, slogans), it is better to register such objects. In order to earn real market and legal advantage famous trademarks could also be acknowledged by the State Intellectual Property Service of Ukraine as well-known among customers of Ukraine.
In addition, taking into account countless legal disputes regarding domain names, the registered TM should be the same as your domain name.
Furthermore, in case of use of new technologies in advertising or modern business methods, those objects may be patented as the inventions or utility models. Meanwhile, the website interface could be protected as an industrial design and/or a copyright object. As a result, the more sophisticated and comprehensive the ways of protection that are chosen, the greater the advantages to e-business they would bring.
What to do if IP Rights have been Violated on the Internet?
Mechanisms for protection of IP rights and interests on the Internet are as follows:
— Filing a complaint to Google/Yandex (or other search platform) regarding the unsanctioned usage of your company’s trademark as the keyword.
— Filing the complaint to the advertiser in order to remove content that violates your IP rights.
— Using notice and takedown measures (where possible).
— Initiating court proceedings and/or proceedings on unfair competition with the Antimonopoly Committee of Ukraine.
Of course, each of these defense mechanisms has its advantages and disadvantages. Thus, in each case there must be analysis carried out as to which mechanism would be more effective if the infringement occurred.
How can you Avoid Becoming a Perpetrator Yourself?
Advertising is certainly an efficient way to influence the purchasing power of people. However, such effect on users leads to potential misuse and abuse while advertising a business online. That is why in many states advertising is tightly regulated so as to prevent unfair treatment and control of business.
If the company starts advertising, it must comply with a number of laws and regulations that may differ as to the state and may even depend on the content of advertising.
There are general issues that the company must consider while starting an advertising company on the Internet. That is, the issue of geographical indications (in particular, there is a need to carefully analyze whether such GI will not mislead users as to the origin of goods or services); other companies’ trademarks (need to check whether your company accidentally uses the TM of others); keywords (it is crucial not to infringe others rights to trademarks and, respectively, not to use them), copyright (there is a need to check whether in advertising the company uses others pictures, drawings, slogans, catchwords, etc.).
Therefore, taking into account the growing popularity of the means of business marketing on the Internet in Ukraine, subsequent lawsuits connected to their usage are highly expected in the near future. Consequently, currently it is very important to protect your own IP rights properly and to get acquainted with international trends of judicial practice regarding such issues.