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‘Back to the basics’ of IP law

Kristin P Herber

OCEAN CITY — More and more intellectual property issues might involve the virtual world, but how legal disputes in that realm get resolved remains grounded in the real world.

“Courts go back to the basics every time,” said Kristin P. Herber, one of four experts who provided an overview of recent IP issues in the virtual world Friday at the Maryland State Bar Association’s annual meeting.

Take credit card giant Visa’s lawsuit against a company called eVisa. The word “visa” might have a dictionary meeting, but to attach it to a business other than credit cards would be akin to “Tylenol snowboards” or “Harry Potter dry cleaners.”

“The ‘e’ being in front doesn’t make a difference,” said Herber, a partner at Tydings & Rosenberg LLP in Baltimore. “It’s not really whether the word is common but how it’s used in context.”

Context also played a role in why Toyota lost its lawsuit against a car broker that had “Lexus” in its Internet domain names. A federal appellate court ruled the domain name was a fair use, and to rule otherwise would mean a domain that included “we are not Lexus” would be a trademark violation, Herber said.

“It’s really easy to spot an endorsement,” she said.

It is harder for a business to successfully sue an online service provider that might have millions of users, according to Herber and another panelist, Washington, D.C., lawyer Frederick N. Samuels.

Herber cited Tiffany & Co.’s unsuccessful lawsuit against eBay for listing fake jewelry on the auction website. The courts found eBay had to have “contemporary knowledge” of specific instances where users had posted the fake jewelry for sale, Herber said. eBay, for its part, instituted a five-day grace period before luxury items are posted on the site to allow the companies to ensure that fakes or counterfeits do not go up for auction.

“Tiffany has got to be vigilant and has to constantly search eBay,” she said.

Samuels cited Viacom’s lawsuit against YouTube over tens of thousands of copyrighted videos uploaded to the website.

“The liability turns on whether YouTube had actual knowledge,” Samuels said.

A federal appellate court found YouTube and other service providers are protected under the Digital Millennium Copyright Act if they take certain steps to prevent copyrighted material from appearing on their sites. YouTube took down the offending videos as soon as it was aware of them.

“If your client is a service provider, you want to make sure you take swift action, and if you do that you’re in pretty good shape,” he said.

Or you could just be Google, according to Herber. Rosetta Stone, which makes language-learning software, sued the search engine giant for allowing the company’s rivals to purchase sponsored ads on search results pages. Google’s use of “Rosetta Stone” was found to be functional because it helped people find information online and actually increased the software company’s brand awareness.

“Basically, in the cases I’ve seen, it’s good to be Google,” Herber said. “They always win.”

One area where Google is still trying to make headway is in social media. Just to be safe, Facebook, the reigning social media king, purchased 18 patents from rival Friendster last year at a reported cost of $40 million, according to Patricia Campbell, director of the Maryland Intellectual Property Legal Resource Center.

“Most people think Facebook felt like it had to lock up as much in the IP world as it could in case Google became active” with a social networking site said Campbell, an associate professor at the University of Maryland Francis King Carey School of Law.

On its own, Facebook has patents related to “tagging” people in digital media, geo-location and its newsfeed, Campbell said. By contrast, Twitter and LinkedIn, two other popular social networking sites, do not have any patents or pending applications, she said.

Companies are also trying to patent technologies related to virtual games, Campbell said. IBM has applied for patents that would assist with vandalism and missing items in online games. Zynga, which has an office in Timonium and created FarmVille, has applied for a patent for virtual playing chips for online games.

The money consumers spend on the playing chips would not be redeemable, Campbell noted.

“They can play, they can win, but they can’t cash out. And Zynga gets to keep the money,” she said. “Pretty good deal, right?”