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Reposted from Cybersecurity, Privacy and Data Security, Security Breaches, Technology and Commercial

By: Tara Swaminatha and Aravind Swaminathan

If your company has a Point of Sale (POS) terminal anywhere in its infrastructure, you are no doubt aware from the active media coverage that malware attacks have been plaguing POS systems across the country.

Just within the past week, the New York Times has reported that:

Companies are often slow to disclose breaches, often because of the time involved in immediately-required investigations;

Congress is beginning to make inquiries of data breach victim companies; and

Even those companies who have conducted cybersecurity risk assessments still get attacked, often during the course of implementing new solutions to mitigate potential problems and protect their customers’ payment cards or other personal information.

Former employees can be a source of information to the media about your efforts to investigate and secure your POS systems.

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By John Wilks

This year’s conference of Marques, the European brand owners’ association, took place in the European Union’s most troubled and ancient capital, Athens, under the lamentably resonant strapline “Sign of the Times”.  Among the many interesting topics shoe-horned under this banner, one theme seemed to keep resurfacing: the challenge of locating internet infringers.

This is by no means a new problem: IP infringers have for obvious reasons always sought to cover their tracks.  But the advent and continuing expansion of the internet and social media have dramatically increased the scope for anonymous infringements from cyberspace.  The impending arrival of over 1,000 new gTLDs- including many for common generic terms, threatens to further expand the possibility for anonymous infringement.

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Guest blog post by Melanie Garcia.  Melanie is a Summer Associate in the Washington, D.C. office of DLA Piper LLP.  She is a J.D. Candidate at the Georgetown University Law Center.

Unhappy customers have been embracing the Internet for years to vent their frustrations with companies.  Lately, several bloggers have capitalized on websites that lampoon popular companies and companies are beginning to fight back.  
Recently, Forever 21 threatened to sue fashion blogger Rachel Kane for diluting its brand and trademark with her blog, WTForever21.com.  Forever 21, a global retail chain of clothing and accessories for young men and women, reportedly sent cease-and-desist letters to Ms. Kane regarding her blog.  On WTForever21.com, Ms. Kane posts and satirizes images of clothing from Forever21.com.  For example, on April 14, 2011 Ms. Kane posted a picture of earrings from Forever 21 with the following caption, “Those bead curtains that provide no privacy and serve no other purpose than to get tangled around each other, or in your hair when you walk through them, came back from 1973 and decided to become earrings.”  While this is understandably offensive to the company, it seems Forever 21 has chosen not to pursue further action against Ms. Kane.  
There are many reasons why Forever 21 may have chosen not to bring a suit against Ms. Kane.  Forever 21 has had several widely publicized legal battles over alleged copyright infringement.  Widespread coverage of its actions against Ms. Kane throughout the fashion blogosphere and other social media outlets may be one reason Forever 21 shied away from the lawsuit.  
Another possible reason is that the law is also complicated in this area and any legal battle would be hard won.  In order to win a dilution claim, a plaintiff must prove that the defendant’s use of a mark is confusing and therefore dilutes the plaintiff’s trademark.  A dilution claim must also prove that the defendant is using the plaintiff’s mark as a mark.  It is possible that the WTForever21.com domain name does just that, but it is less clear whether this use is confusing.  
Moreover, a claim against WTForever21.com would not just involve a trademark dilution claim.  Because WTForever21.com is a blog such a claim would also implicate Ms. Kane’s First Amendment protected speech.  First Amendment freedoms would protect Ms. Kane’s blog from liability unless the court found that the title of the blog, WTForever21.com, has no artistic relevance to the blog’s product, i.e., its content.  The blog would also be liable if it made explicitly false statements regarding the original mark.  Because Ms. Kane’s blog is a critique or parody site of Forever 21, and because the site explicitly states that it is not affiliated with Forever 21, it is possible that First Amendment defenses might defeat a claim of trademark dilution.  
If  such a claim is not defeated on First Amendment grounds, it is possible that Ms. Kane could argue that the blog is a parody.  To be found a parody, the blog must fall under the exception in the Lanham Act that protects parodic competing marks from liability.  For a parody to meet this exception under the Lanham Act, it must  not be a “designation of source for the person’s own goods or services.”  15 U.S.C. § 1125(c).  Under the Second Circuit’s analysis in the “Charbucks” case, Starbucks Corp. v. Wolfe’s Borough Coffee, Inc., 588 F.3d 97 (2nd Cir. 2009), the competing Charbucks mark could not use parody as a shield because Charbucks used the mark “as a designation of source” for the defendant’s goods, and the mark was “at most, a subtle satire.”  The court held that the Charbucks mark did not meet the parody threshold because rather than being a “satire or irreverent commentary of Starbucks” it functioned as a signal to consumers that Charbucks was a Starbucks competitor.  Under the Second Circuit’s analysis, because WTForever21.com does not signal itself as a competitor but is in fact an irreverent commentary, Ms. Kane’s blog likely falls under the Lanham Act’s exception.   
Under the Fourth Circuit’s analysis of trademark parodies, finding that a mark is a parody is not an automatic defense to trademark infringement.   However, if a mark is found to be a parody this will likely weigh in favor of the defendant, especially if the original mark is recognizable and there is little chance of confusion.  An infringing mark is a parody in the Fourth Circuit if it successfully creates an association with the famous mark and simultaneously communicates that it is not the famous mark.  Under the Fourth Circuit’s analysis, WTForever21.com will also likely be free of liability because it both signals the famous global retailer Forever 21, and that it is not the retailer itself.
Like WTForever21.com, other sites like Lamebook.com or Regretsy.com may also be protected by the First Amendment and because they are parody sites.  While this may irk the original trademark owners, Facebook.com and Etsy.com, bloggers and blog-readers will continue to revel in the snide commentary these parody sites provide.  
However, First Amendment protections do not mean that bloggers always get a free pass.  Bloggers using a trademark to cultivate traffic to their site but whose site is not related to the trademark may be found to be infringing.  For example, if the blog Lamebook.com was about pet grooming rather than lame comments on Facebook, its title would have no relevance to the blog’s expressive content.  Facebook might then have a dilution of trademark claim against Lamebook.com if it could prove confusion.  Moreover, any blog that makes a false claim or purports to be authorized by the trademark owner will likely be subject to liability.  Even when it is possible that First Amendment claims might prevent blogger liability, trademark owners may still want to consider bringing suit against bloggers for trademark dilution when there is a real chance of confusion regarding the infringing mark.  
Companies should monitor the Internet for blogs that use their trademarks, including blogs that critique them, to ensure that bloggers are not making false claims and that the blogs are not being confused with the original marks.  Trademark owners should also consult with counsel if there are any blogs that they believe might cause trademark confusion, regardless of whether the blog is protected speech.  Counsel can help determine whether bringing suit is a viable option.

Unhappy customers have been embracing the Internet for years to vent their frustrations with companies.  Lately, several bloggers have capitalized on websites that lampoon popular companies and companies are beginning to fight back.  

Recently, Forever 21 threatened to sue fashion blogger Rachel Kane for diluting its brand and trademark with her blog, WTForever21.com.  Forever 21, a global retail chain of clothing and accessories for young men and women, reportedly sent cease-and-desist letters to Ms. Kane regarding her blog.  On WTForever21.com, Ms. Kane posts and satirizes images of clothing from Forever21.com.  For example, on April 14, 2011 Ms. Kane posted a picture of earrings from Forever 21 with the following caption, “Those bead curtains that provide no privacy and serve no other purpose than to get tangled around each other, or in your hair when you walk through them, came back from 1973 and decided to become earrings.”  While this is understandably offensive to the company, it seems Forever 21 has chosen not to pursue further action against Ms. Kane.  

There are many reasons why Forever 21 may have chosen not to bring a suit against Ms. Kane.

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Our group spends a significant amount of time working on issues relating to the transformation of copyright and trademark laws in the 21st century. I am particularly passionate about and interested in how the Internet and other new technologies challenge these dynamic areas of law. For my first blog post, I revisited a few of what I see as the most influential cases of 2010. 

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2010 COPYRIGHT AND TRADEMARK CASE HIGHLIGHTS
Capitol Records Inc. v. Thomas-Rasset, No. 06-1497 
This case had two major impacts on the realm of copyright in 2010.
(D. Minn. Jan. 22, 2010)
Opinion
First, in January U.S. District Court Chief Judge Michael Davis for the District of Minnesota remitted a 2009 jury award of statutory damages totaling $1.92 million by 97% to $54,000 against defendant Jammie Thomas-Rasset for willfully infringing plaintiffs’ copyrights by downloading 24 songs using the Kazaa peer-to-peer network.  Judge Davis held that although Plaintiffs highlight valid reasons that Thomas‐Rasset should pay a statutory damages award, the Judge ruled that these facts simply could not justify a $2 million verdict in this case.  He ruled that although this new award was still three times the statutory minimum, this reduced award remains “significant and harsh” and should sufficiently serves both the deterrent and the compensatory purposes of statutory damages.
JUDGMENT IN A CIVIL CASE: Civil File No. 06‐1497 (MJD/LIB)
Judgement
The plaintiffs rejected the reduced damage award and, instead, asked for a new trial on damages.  On November 4, the jury returned a verdict awarding statutory damages in the amount of $62,500 for each of 24 songs for a total amount of $1.5 million.  These file-sharing cases have a profound impact on the future of copyright in the United States as the damage awards have consistently shocked the public conscience.
Reed Elsevier v. Muchnick, No. 08–103 (U.S. Mar. 2, 2010)
Opinion
In one of the only copyright cases to reach the Supreme Court of the United States this year, the Supreme Court overturned a Second Circuit Court of Appeals decision which held that a Section 411(a)’s registration requirement is a precondition to filing a copyright infringement claim.  The Supreme Court, however, ruled that a copyright holder’s failure to comply with this registration requirement does not restrict a federal court’s subject-matter jurisdiction over infringement claims  involving unregistered works.  
Tiffany Inc. v. eBay Inc., Case No. 08-3947 (2d Cir., Apr. 1, 2010)
Opinion
The Second Circuit for the United States Court of Appeals largely affirmed the holdings of the United States District Court for the Southern District of New York, holding that eBay, the proprietor of a website through which counterfeit Tiffany merchandise was sold — did not, on the facts presented, engage in trademark infringement, false advertising, or trademark dilution.  The court ruled that for contributory trademark infringement liability to lie, a service provider must  have more than a general knowledge or reason to know that its service is being used to sell counterfeit goods.  For this reason, eBay itself could not be held liable for direct or contributory trademark infringement or for trademark dilution. The Court remanded the case, however, with respect to Tiffany’s claim of false advertising. This case begins to pave the legal precedent path with respect to liability of internet-based sales websites and counterfeit goods.
Viacom Int’l Inc. v. YouTube, Inc., No. 07 Civ. 2103 (S.D.N.Y. June 23, 2010)
Opinion
The United States District Court for the Southern District of New York granted summary judgment in favor of video-sharing service YouTube (owned by Google) on all of media company Viacom’s claims for direct and secondary copyright infringement. The court held that YouTube was entitled to the protections of the Digital Millennium Copyright Act’s (“DMCA”) “safe harbor” provisions, 17 U.S.C. 512(c).  The case continues to defend the boundaries of the DMCA safe harbor provision, with the court concluding that “[g]eneral knowledge that infringement is ‘ubiquitous’ does not impose a duty on the service provider to monitor or search its service for infringements.”
Visa Int’l Serv. Ass’n v. JSL Corp., No. 08-15206 (9th Cir. Jun. 28, 2010)
Opinion
The Ninth Circuit for the United States Court of Appeals affirmed the U.S. District Court for the District of Nevada’s summary judgment ruling, holding that JSL Corporation’s (“JSL”) “eVisa” mark diluted Visa International Service Association’s “Visa” mark under the theory of dilution by blurring, which occurs when a mark previously associated with one product also becomes associated with a second.  15 U.S.C. § 1125(c)(2)(B).  The court decided that even though Visa doesn’t own the word “visa” and may not  “deplete the stock of useful words” by asserting otherwise, the injury addressed by anti-dilution law in fact occurs when marks are placed in new and different contexts, thereby weakening the mark’s ability to bring to mind the plaintiff’s goods or services.  This case has deep repercussions for brands that employ generic or common words as part of their trademarks.
Toyota Motor Sales v. Tabari, No. 07-55344 (9th Cir. Jul. 8, 2010)
Opinion
The Ninth Circuit for the United States Court of Appeals vacated and remanded an injunction against auto-brokers Farzad and Lisa Tabari issued by the District Court for the Central District of California in a trademark infringement claim brought by Toyota Motor Sales U.S.A. (“Toyota”), the exclusive distributor of Lexus vehicles in the United States.  The Court of Appeals ruled that Tabaris’ use on their website of copyrighted photography of Lexus vehicles and the circular “L Symbol Design mark,” in addition to the use of the string “lexus” in their domain names.  The Ninth Circuit held that the nominative fair use doctrine allows truthful use of a mark, even if the speaker fails to expressly disavow association with the trademark holder, so long as it’s unlikely to cause confusion as to sponsorship or endorsement.  This case has great reverberations for domain name use because it extends the notion of nominative fair use to hold that trademarks are part of our common language, and we all have some right to use them to communicate in truthful, non-misleading ways.
MGA Entertainment, Inc. v. Mattel, Inc., No. 09-55673 (9th Cir. July 22, 2010)
Opinion
The Ninth Circuit for the United States Court of Appeals reversed the District Court’s decision to enter equitable relief based on a jury’s findings that Mattel-competitor MGA had committed three state-law violations relating to a former employee’s involvement in creating The Bratz Dolls during the scope of his employment at Mattel.  The court also issued a general verdict finding MGA liable for infringing Mattel’s copyrights in its former employee’s works.  In addition to assignment of ownership of the Bratz brand, the district court also ordered Bratz manufacturer MGA to pay Mattel $10 million in damages.  Instead, the Ninth Circuit ruled that even if Bryant’s employment agreement assigned his ideas to Mattel, the value of the trademarks the company eventually acquired for the entire Bratz line was significantly greater because of MGA’s own development efforts, marketing and investment.  The case is particularly important for companies considering the language in their employment contracts: it’s no longer clear exactly how broadly or narrowly the phrase “at any time during my employment” should be interpreted.
In re Chippendales USA, Inc., Serial No. 78/666,598 (Fed. Cir. Oct. 1, 2010)
Opinion
The United States Court for the Federal Circuit affirmed the Trademark Trial and Appeal Board’s refusal to register Chippendales abbreviated tuxedo costume — wrist cuffs and a bowtie collar without a shirt — as inherently distinctive.  The court looked to the use of the Playboy bunny suit, including cuffs and a collar, as substantial evidence supporting the Board’s factual 
determination that Chippendales’ Cuffs & Collar mark is not inherently distinctive.  This case is important in helping define the boundaries for which businesses can apply for trade dress protection for costumes.
Righthaven v. Realty One Group, 2:10-cv-1036-LRH-PAL (D. Nev. Oct. 18, 2010)
Opinion
The District Court of Nevada granted defendant Michael Nelson’s motion to dismiss, ruling that Nelson’s use of copyrighted materials on a blog falls within the Fair Use doctrine. Nelson displayed an unauthorized copy of a news story entitled “Program may level housing sale odds” which was originally published in the Las Vegas Review Journal.  Although Righthaven obtained a transfer of rights for the article from the Review Journal, the court held that when the traditional fair use analysis was applied to the situation, Nelson did not infringe Righthaven’s copyright as a matter of law.  The proliferation of the Righthaven lawsuits is notable because the campaign echoes the attempts by the music industry to aggressively enforce copyrights via the courts.

Capitol Records Inc. v. Thomas-Rasset, No. 06-1497*

680 F.Supp.2d 1045 (D. Minn. Jan. 22, 2010)

Overview: In January, U.S. District Court Chief Judge Michael Davis for the District of Minnesota remitted a 2009 jury award of statutory damages totaling $1.92 million against defendant Jammie Thomas-Rasset by 97% to $54,000.  This damages award arose from claims that Thomas-Rasset willfully infringed plaintiffs’ copyrights by downloading 24 songs using the Kazaa peer-to-peer network.  Judge Davis held that although Plaintiffs highlight valid reasons that Thomas‐Rasset should pay a statutory damages award, the Judge ruled that these facts simply could not justify a $2 million verdict in this case.  He further opined that although this new award was still three times the statutory minimum, this reduced award remains “significant and harsh” and should sufficiently serve both the deterrent and the compensatory purposes of statutory damages.

Judgment in a Civil Case: Civil File No. 06‐1497 (MJD/LIB)

Overview: The plaintiffs rejected the reduced damage award and, instead, asked for a new trial on damages.  On November 4, the jury returned a verdict awarding statutory damages in the amount of $62,500 for each of 24 songs for a total amount of $1.5 million.  

Takeaways: P2P file-sharing cases are having a profound impact on the future of copyright as applied to individual users of online platforms.  Judges in at least two jurisdictions have changed the jury awards — both citing them unconscionable — potentially leading to not only a split in future appeals but also calls for legislation from all sides.

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