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Domain Names Grow Complex and Pricier on the Information Superhighway

As we reported last in previous issues of Legal Bytes, the Internet Corporation for Assigned Names and Numbers (ICANN) is preparing to open up the generic top level domain space to virtually any string of letters. The 21 existing generic top level domains (gTLD) include .com, .net, .org, .edu, .info and 16 others.

What Does This Means To Your Domains?   Under the proposal, brand owners will be able to apply for gTLDs corresponding to their brands, and entities representing communities, or wishing to organize a community or common interest channel, will be able to apply for names representing those various interests (e.g., .bank, .medicine, .law, .baseball, etc.).

Why Should I Care? These new domains might be used in many ways, but be prepared for steep costs. If someone wants to buy a new top level domain (and, in effect, act as the registry for the purchase or distribution of second level domains), it can be very expensive – $185,000 plus $25,000 per year, plus other fees and costs associated with the processing of the application. . .   and the IP stakes involved in this proposal are high. The comments submitted to ICANN on its First Draft Proposal from about 300 corporations, associations, governmental agencies and individuals worldwide, were largely negative and reflected serious concerns about trademark rights, increased cybersquatting, monitoring costs, defensive registrations and the like. Many complained of the steep toll these costs already take over the 21 existing domains and painted a gloomy choice under the new proposal: increase expenditures on trademark defense over potentially hundreds of new domain channels, or refuse to make the expenditure and potentially jeopardize the strength of a brand.

What You Can Do? Applications will likely not be accepted until, at the earliest, December or the first quarter of 2010, so this is your opportunity to make your concerns known. In the meantime, ICANN submitted its Second Draft Guidebook that purports to address some of the concerns raised by the comments and at least pays lip service to giving further consideration to the trademark questions. Comments on the Second Draft Guidebook are due April 13. ICANN is also soliciting comments on recent related studies and is preparing to issue a report addressing trademark considerations later in April. We know the issues involved and are familiar with this process. We represented the Association of National Advertisers (ANA), the advertising industry’s largest trade association, in connection with its submission to ICANN regarding the First Draft Guidebook, and we are working with the ANA on formulating its position on the second draft. You can click on the highlighted links to read the ANA’s submission to ICANN on the First Draft Guidebook, and an updated Client Alert on this topic. If you are interested in submitting your comments and would like us to assist you, I strongly encourage you to contact John Hines.

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Google To Launch ‘Interest-Based’ Advertising

Rumor has it that Google will be launching its much-publicized "interest-based advertising" in April, allowing advertisers to serve ads based on a user’s prior interactions (e.g., browsing the advertisers’ websites, tracking interests). Google will track categories of web pages that users visit in Google’s content network and if, for example, a user visits motion picture and film pages, Google may add them to a corresponding interest category that might be labeled "motion picture aficionado." As we understand it, Google will enable use of the DoubleClick DART cookie in advertising served on websites with AdSense for content advertising. Thus, when a user browses an AdSense publishers’ site and views or clicks an ad, the user’s browser may have a cookie added.

For you loyal Legal Bytes readers, that means you should review your online terms of use, terms of service, privacy policies and online disclosures to be sure they cover this activity if it applies to your web presence, advertising and marketing activities. If you will need to and you don’t already take third-party ad servers into account, you may have to amend these to do so. 

As you know, Legal Bytes cannot provide legal advice (you have to be a client for that). Nor could we possibly advise without knowing the specifics about you, your situation, your jurisdiction(s), or the facts that apply. But consider the following sample (which assumes only non-personally identifiable information is collected) that illustrates the type of language one might consider:

We or our advertisers use third parties to serve advertising on our website and web pages when you visit or browse, and some of them use cookies or other technology to collect information about your visit. This information may be used to improve the operation of our website and enhance your experience as a visitor and user, and also to serve advertising about goods and services that might be of interest to you. No personally identifiable information (e.g., name, address, email or phone number) is collected this way or in this process.

Of course, you can add links or contact information for those who want more information, and you may even direct them to the applicable Google web page,or any other third-party ad-serving network’s corresponding page to either get more information, or learn how to opt out of or disable cookies.

Now go call the Rimon lawyer you normally deal with for help or contact me (Joseph I. Rosenbaum). We put together and advise companies in connection with their terms of service, privacy policies, and disclosures, and their online, wireless and web presence, all the time. How can we help you?

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Court Affirms FCC’s Rule Requiring Prior “Opt-In” to Share Customer Data

A U.S. Circuit Court in the District of Columbia has upheld the FCC’s rule that requires telecommunications carriers to obtain prior “opt-in” consent from customers before disclosing their personal information to joint venture partners or independent contractors for marketing purposes. The rule, which was adopted in 2007, covers all Customer Proprietary Network Information (CPNI) and also applies to service providers offering VoIP (Voice Over IP) services to customers. For those who don’t stay updated on what the FCC rules mean by CPNI, it includes information such as the phone numbers called by a consumer, the frequency, duration, and timing of the calls and any additional services the consumer is receiving (e.g., call waiting). Our telecommunications experts expect the FCC to enforce this rule aggressively. If you want to read the case yourself, go to National Cable & Telecommunications Association v. FCC , but if you really want to understand what it means to you, contact Robert H. Jackson or Judith L. Harris in our Washington, DC Office.

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FCC Issues Parental Controls’ Inquiry for Video and Audio

On March 3, 2009, the Federal Communications Commission (“FCC”) released a Notice of Inquiry to implement the Child Safe Viewing Act of 2007 (“CSVA”), which directs the FCC to examine advanced parental control technologies that would be compatible with various communications devices and platforms.

Click here to read the full alert, written by Amy S. Mushahwar, Judith L. Harris, and John P. Feldman.

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FTC Testimonial and Endorsement Guides Stimulate Industry Comment

Rimon acts as counsel to many of the advertising industry’s leading trade and membership associations – The Association of National Advertisers, The Word of Mouth Marketing Association, the Interactive Advertising Bureau, to name only a few. As you may have notices, a recent Legal Bytes blog post noted that just last month the FTC supplemented its December 2007 “Self-Regulatory Principles for Online Behavioral Advertising” report.

Well the FTC has been busy in re-examining it’s policies regarding testimonials and endorsements in this digital age. As previously reported in Legal Bytes, the FTC indicated it was revising it’s Testimonial and Endorsement Guides (the first time since the 1980s). Well comments have now been submitted and we strongly recommend that anyone in the advertising and marketing business take a look at some of them. In fact, to help you, Legal Bytes has a couple you can look at right now – Comments for The Association of National Advertisers and Comments for The Word of Mouth Marketing Association – and when you finish reading them ask yourself:

  • Now that public comments are in, what do we think will happen?
  • What is in front of the FTC that might affect its decision making?
  • How would self-regulation differ from the way the FTC has been operating?
  • What does the new FTC Chairman think about self-regulation?
  • Do we expect the new administration to shift direction? If so, which way?
  • How is all this likely to affect advertising and marketing using product placements, branded entertainment, blogs, consumer generated content, buzz, viral and word of mouth marketing?

If you need to know, you need to contact John Feldman, Douglas Wood or Joseph Rosenbaum – or your favorite Rimon attorney – who will be more than happy to help you.

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Behave Yourself – FTC Behavioral Ad Guidelines Promote Self Regulation, BUT . . .

FTC Releases Revised Ad Guidelines: Are New Marketing Practices in Your Wallet?

On February 12, 2009, the FTC supplemented its December 2007 “Self-Regulatory Principles for Online Behavioral Advertising” report, highlighting the FTC’s voluntary best practices for the behavioral advertising industry. While continuing to support self-regulation, that should not be taken as a vote of confidence for continuing the status quo. Change is in the air and you may well need to:

  • develop more consumer education concerning behavioral advertising;
  • develop internal privacy protections for anonymous data profiles;
  • create opt-in notice mechanisms for collection of sensitive information; and
  • create opt-in notice mechanisms for retroactive changes to privacy practices.

. . . and if you think your privacy policies are ok, as is, think again. The FTC has taken a broad brush to paint a picture of what it considers personally identifiable information (PII) and what ‘sharing’ of that information may require. Our experts Amy S. Mushahwar and John P. Feldman have written an alert that describes what you need to know in more detail. To read the full alert, with links to the FTC releases, click here.

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All the News In Print We Fit!

This post was written by Judith L. Harris.

On Feb. 17, 2009, the U.S. District Court for the Southern District of New York issued an opinion in a case with potentially wide-ranging implications for anyone engaged in the online dissemination of news (Associated Press v. All Headline News Corp., et al., 08 Civ. 323 (PKC). In denying a motion to dismiss the suit, the court cleared the way for a possible showdown between old and new media. 

The lawsuit by AP stems from an allegation that AHN enlisted “poorly paid individuals” to cull the Internet for news, including AP stories, and then either rewrote or cut-and-pasted those stories and disseminated them to the websites of its own paying customers in the form of news reports and breaking news, thereby freeloading on the great effort expended, and great expense incurred, by “one of the world’s oldest and largest news organizations,” self-described as the “gold standard of objective journalism.”

This appears to be the first case to apply an old principle known as the “hot news” doctrine to Internet content. However, in this era of greatly reduced advertising and subscriber revenues, and life-or-death challenges for even the most venerable newspapers and other news-gathering organizations, it is not likely to be the last attack on alleged online “freeloaders.”

The “hot news” doctrine invoked by AP and relied on by the court goes back to a 1918 U.S. Supreme Court decision (International News Service v. Associated Press, 248 U.S. 215), which found breaking news to be “quasi property,” subject to protection from free-riding, or misappropriation, by competitors. In International News Service, the Supreme Court held that allowing one news agency to appropriate and profit from the work of another would “render publication profitless, or so little profitable as in effect to cut off the service by rendering the cost prohibitive in comparison with the return.” (Id. at 241.) As the Court explained, news gathering carries with it “the expenditure of labor, skill and money,” and its appropriation by another “is endeavoring to reap what it has not sown.” (Id. at 239-40.) 

Although the common law origins of this doctrine render it non-binding now in federal courts (where it has been preempted by the federal Copyright Act), the doctrine is still recognized in various states, including New York, the state law found by the court to govern AP’s claims. In New York, the court ruled, a cause of action for misappropriation of “hot news” remains viable and has not been preempted.

The court also allowed AP’s claims under the Digital Millennium Copyright Act (for “intentionally altering or removing copyright management information”) and under New York State unfair competition common law to go forward, but dismissed two counts of AP’s complaint based on the Lanham Act (for trademark infringement and for unfair competition under the statute).

The court’s docket does not yet reflect when an answer will be due, but the case bears further monitoring by anyone engaged in the gathering and/or dissemination of news.

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Google Inoculated Against Fraudulent Advertisers

The Communications Decency Act (CDA) appears to have immunized Google from liability associated with advertisements placed through its “AdWords” program by some allegedly fraudulent mobile service providers. Because the allegations did not claim that Google was an “information content provider” itself, Google could take advantage of the statutory immunity granted by the CDA. That said, the federal court in San Jose did note that the plaintiff claimed Google assists customers in picking keywords and drafting AdWords, and if the plaintiff can amend its complaint and substantiate the fact that those activities constitute providing or creating content, this case may take a different turn. Let’s see how the cookie crumbles.

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Better to Lose Face Than Facebook

Facebook, the very informal and ostensibly open social network, hinting at an apology for what its CEO acknowledged were “overly formal and protective” Terms of Service, did an abrupt about-face recently, retracting them and reverting to its old Terms of Service—presumably reacting to a sea of complaints from just about everyone. Complaints? Over legal terms—does anyone still read them? Well, they do, and they didn’t like what they read—particularly the part that claimed unrestricted, perpetual ownership of your personal data, even if you decide to delete your entire account and go away. 

While we respect Facebook’s right to better manage, control, and disclose to consumers how and for what purpose it treats and handles personal data, it highlights a number of things the online world continues to teach us. First, don’t assume those innocuous changes buried somewhere in terms of service, terms of use, privacy policies, codes of conduct, rules of the road, or whatever you choose to call them, aren’t being scrutinized—by consumers, by your customers, by the media and, lest we forget, by regulators and legislators. While Facebook has not admitted it was caught a bit red-faced, it is taking your feedback in a “Facebook Bill of Rights and Responsibilities” group to which you can contribute your thoughts. For those in the know, Facebook’s population has grown to more than 175 million users—does that make it the sixth-largest country in the world? Hmm, I wonder if that country has a growing budget deficit too; we’ll have to wait for the State of the Reunion speech, when results are posted, to find out.