Archive for August 26th, 2011

Hard times for an internet scofflaw. Also, do you do enough to protect your online content?

I was going to originally post this yesterday, but hurricane preparedness (including trips to Home Depot and the supermarket) got my time instead. Without further adieu…

In a previous blog posting (“What’s Your Reputation Worth to You?”), I posted about protecting your business’ reputation online.  In this blog posting we’ll give a wide overview of protecting your intellectual property online – a place where it is especially vulnerable.  Before we do that, I thought I would give everyone an update on Mr. Borker, who was the central figure in my previous posting.

As you may remember, Mr. Borker built his online business by being so bad at customer service, that so many people complained online, his website kept moving higher in the Google rankings.  Well, things have not gone well for Mr. Borker since The New York Times published an article about Mr. Borker’s business.  Since that time, Google altered its algorithm so websites that give customers “extremely poor user experience” do not benefit from the negative feedback sinking his ranking.  Worse yet for Mr. Borker, numerous federal and state (New York) agencies are investigating him for various crimes culminating with his arrest and a plea of guilty for various charges including mail and wire fraud by the United States Postal Inspection Service.  When arrested, the police seized Mr. Borker’s computers and reportedly found numerous counterfeit glasses frames he was passing off as authentic.  The federal district court in Manhattan initially denied bail.

Besides the obvious, Mr. Borker’s arc from successful retailer to jailbird is illustrative for companies who want to protect their intellectual property online.  For all its benefits, the Internet is still something akin to the “Wild, Wild West.”  Mr. Borker was only caught because The New York Times publicized his company.  However, when a business owner struggles to protect its intellectual property online, usually a major media outlet will not be doing their bidding.

First, is a company’s trademark.  Your trademark is what identifies your brand to potential and current customers and encompasses your logo and your name.  If one thinks of any major company, it is equally easy to visualize the name and its accompanying logo.  Unfortunately, the very nature of the Internet makes the bar for trading on someone else’s name very cheap.  For instance, if I wanted to take another’s company’s name/logo (which I’ll call Widget Corp.), I could right-click (and save) the logo from Widget Corp.’s website and then maybe buy a similar domain such as WidgetCorp.net or use a foreign domain extension or even if those were not available, maybe purchase Widget-Corp.com.  Once I purchased a domain name, I could start selling goods similar to Widget Corp. on my website using the Internet traffic of customers who thought I was the real Widget Corp.  This is a problem retailers face on the Internet all of the time and prevention is not easy (and is not confined to retailers).  First, to prevent this problem, I always recommend purchasing domain names covering every foreign and domestic extension and each iteration of your trademark.  Second, I always recommend monitoring your trademark by, at the very least, searching for it in every search engine regularly.

A relatively inexpensive way of retrieving a domestic trademark being improperly utilized someone else as their domain name, is through an arbitration procedure known as the Uniform Domain Name Resolution Policy.  Court actions in federal court in Virginia (where my office and the domain name registry are located) are also possible.  Unfortunately, when it comes to foreign domain names, the process is much trickier.  Each country has its own way of resolving domain name disputes, with some requiring local counsel and paperwork to be filed in the language of that country.

Another way is to contact the host and see if they will take the website offline under threats of a lawsuit (though the wrongdoer would still retain the domain name until you wrestle it from them since the host company and domain name registrar are two different entities).  This has limited success, especially when the website is hosted overseas.  When dealing with a cyber squatter, it is important to consider that they could have their website hosted overseas making it virtually untouchable (if they haven’t already).  Thus, if your target is currently hosting within the United States, you may only have one shot at them until they wise up and transfer their website hosting overseas, so it is important to make that one shot count.

A second form of intellectual property that is especially vulnerable on the Internet is a company’s copyrights.  Unlike trademarks, which have to be registered (for federal protection anyway), copyrights are in full force in effect the minute one creates a work.  For instance, this blog posting has been copyrighted by virtue of its creation (though enforcement in federal courts does require registration).  If we find someone has used text from this blog elsewhere on the Internet without proper attribution, we can send what’s known in the industry as a DMCA Take-Down Notice.  Such a notice puts the host on notice that they could be liable for contributory copyright infringement if the offending text is not removed from the Internet.  Not wanting to be wrapped up in a lawsuit, a host will often take down an entire website – not just the offending text.  This not only applies to text, but also anything else that is copyrightable such as music, pictures, movies, and even graphics.  The penalties for copyright violations can also be criminal – not just civil.  For instance, one music lover of a band posted the band’s unreleased songs on the Internet.  That not only resulted in the website being taken down, but the offending party’s arrest and prosecution (he received house arrest for a few years).  Like with trademark violations, websites with foreign domains which are hosted overseas, are often untouchable to those seeking to enforce their copyrights unless you want to learn the ins and outs of the court systems in countries such as Kazakhstan.

While on the Internet, your copyrights and trademarks are still protected, they are especially vulnerable.  It is important, that as you develop a web strategy and presence, you speak with an attorney who has expertise in this field.  A few short meetings now could save money and heartache in the end when someone tries to trade on your company’s good name or steal its intellectual property.

Please note that I wrote a similar post for centreknowledge.com.  A great blog if your business does any business with the government (or wants to).