Protecting trademarks on the Internet: WIPO wades in

In 2001, the assembly of the Paris Union for the Protection of Industrial Property and the general assembly of WIPO adopted the Joint Recommendation Concerning Provisions on the Protection of Marks and Other IP rights in Signs on the Internet.

In 2010, the World Intellectual Property Organization(WIPO)’s Standing Committee on the Law of Trademark, Industrial Designs and Geographical Indications (SCT) requested that the WIPO secretariat examine the joint recommendation with a view to determining, in particular, whether the new ways in which trademarks can be used on the Internet are adequately addressed by this instrument.

The secretariat presented an overview of the content and the scope of the application of the joint recommendation, as well as a preliminary analysis of whether those issues could be addressed through the principles set forth in the joint recommendation, in Switzerland in 2011.

Purpose and scope of application

The provisions of the joint recommendation aim to provide a clear legal framework for trademark owners and holders of other types of intellectual property rights that wish to use their marks on the Internet and to participate in the development of electronic commerce. The provisions are intended to facilitate the application of existing laws relating to marks, and other industrial property rights in signs, on the Internet, and to be applied in the context of:

• Determining whether, under applicable law, use of a sign on the Internet has contributed to the acquisition, maintenance or infringement of a mark or other industrial property right in the mark, or whether the use constitutes an act of unfair competition;
   
• Enabling owners of conflicting rights in identical or similar signs to use these signs concurrently on the Internet; and
   
• Determining remedies. The joint recommendation does not:
   
• Establish a self-contained trademark regime for the Internet;
   
• Address the question of the determination of the applicable law, which is left to the private international laws of individual states;
   
• Apply in a purely non-commercial context; or
   
• Attempt to re-territorialise the Internet by imposing unreasonably burdensome obligations on those that use signs on the Internet.

Content

The joint recommendation is divided into six parts and covers four main topics:

Linking the use of a sign on the Internet to a particular state or territory (part 2)

The use of a sign on the Internet will constitute use in a state only if the use has a commercial eff ect in that state.

Factors that may be considered by the competent authority include, inter alia, (i) whether the user of the sign is doing or planning to do business in the state in relation to goods or services that are identical or similar to those for which the sign is used on the Internet; (ii) the level and character of the commercial activity of the user in relation to the state; (iii) the connection of an off er of goods or services on the Internet with the state; (iv) the connection of the manner of use of the sign on the Internet with the state; and (v) the relation of the use of the sign on the Internet to a right for that sign in the state.

Determining whether use of a sign on the Internet has contributed to the acquisition, maintenance or infringement of a mark, or whether such use constitutes an act of unfair competition (parts 3 and 4)

The joint recommendation suggests that, in determining the protection of rights for marks and other signs, states take into consideration situations that might appear unusual if they are compared with offline uses, such as using signs in banner advertisements, selling or purchasing signs as keywords for search engines to use as metatags, using signs in uniform resource locators (URLs), using signs as search terms, or any other new forms of use that may be possible in the future.

However, only the applicable law determines whether an infringement has, in effect, taken place and states are not required to consider online uses as generally infringing marks or other industrial property rights for signs.

Resolving conflicts of signs on the Internet (part 5)

The notice and avoidance of confl ict procedure is an attempt to balance the interests of legitimate users, who are permitted to use a sign and act in good faith on the one hand, and the interests of owners that might be infringed by such use on the other. Under this procedure, users who are permitted to use a sign are exempt from liability up to the point when they receive a notification of infringement, as long as they use the sign in good faith.

However, once they have received a notice of infringement, they will have to take measures to avoid or end the conflict.

Providing for Internet-specific remedies (part 6)

A decision on infringement remedies should take the territorial limitation of trademark rights into account. Remedies should be limited, as far as possible, to the territory in which a right is recognised, and they should be available only if an infringing use of a sign is deemed to have taken place in that territory.

"THE NOTICE AND AVOIDANCE OF CONFLICT PROCEDURE AND THE REMEDIES SET OUT IN THE JOINT RECOMMENDATION DO NOT ADDRESS THE TYPES OF TRADEMARK USES ON THE INTERNET"

Furthermore, the joint recommendation provides that remedies should be proportional to the commercial effects of uses in a state. Courts should balance the interests, rights and circumstances that are involved and the user of a sign should be given the opportunity to propose an effective remedy. A use of a sign should not be prohibited any more than is proportionate to the commercial effect that the use has produced in a state. Injunctions should generally be limited to what is necessary to prevent or remove the commercial effect in the state in which the infringed right is protected.

The competent authority should refrain from granting global injunctions. However, the provision does not completely exclude prohibitions of use, which can be justified in cases of bad-faith use, such as cybersquatting. The joint recommendation contemplates a general exclusion of global injunctions in situations in which users do not act in bad faith and if they either hold a right in that sign themselves, or are otherwise permitted to use the sign on the Internet in the way that they use it.

Possible new standards for the presence of secondary liability of Internet intermediaries

Almost 10 years after the adoption of the joint recommendation, the Internet has provided countless new ways for ingenious businesses and individuals to refer to trademarks in a manner that affects the trademark holder’s business. These new methods may not directly associate a mark with goods or services that the user is offering for sale and may even be hidden from a consumer’s view.

Practices such as the unauthorised use of trademarks as keywords by search engine operators or within listings for non-genuine goods on auction sites, or the use of trademarks on virtual objects that are traded in virtual worlds, constitute clear challenges to the traditional application of trademark law.

Recently, a significant number of cases have been brought before national and regional courts. In deciding those cases, courts have resorted to trademark law principles, often in combination with other statutory laws that regulate electronic commerce or intellectual property (IP) enforcement.

Solutions differ from one jurisdiction to another. These new challenges regarding the use of trademarks on the Internet include the liability of Internet auction sites for trademark infringement, search engines for the sale of trademarks as keywords, and trademark infringement in virtual worlds and social media.

The patterns in recent cases regarding the use of trademarks on the Internet generally involve three categories of actors: (i) trademark holders; (ii) Internet intermediaries, such as operators of Internet auction sites, search engines, virtual worlds and social media; and (iii) users of the services that are offered by Internet intermediaries.

Trademark holders have argued that Internet intermediaries and users should be held liable for acts that allegedly constitute trademark infringement (primary or direct liability of Internet intermediaries and services users), or that Internet intermediaries should be held liable for the acts of the users of their services that allegedly constitute trademark infringement (secondary or indirect liability of Internet intermediaries).

The WIPO secretariat finds in its analysis that the joint recommendation addresses types of trademark uses on the Internet to a certain extent. However, while the concept of commercial effect is relevant for the purposes of the new forms of use of a sign that are made possible by technological advances, the notice and avoidance of conflict procedure and the remedies set out in the joint recommendation do not address the types of trademark uses on the Internet.

Additionally, the provisions of the joint recommendation do not address certain other issues, such as the liability of Internet intermediaries, that arise with regard to the current types of trademark uses on the Internet.

While the secretariat correctly assumes that the development of agreed standards with respect to the primary liability of Internet intermediaries for the infringement of third-party trademarks may present considerable difficulties due to the differences in the substantive trademark laws of national and regional jurisdictions, and that due consideration should be given to the rapidly changing nature of the Internet and the number of Internet intermediaries that are present on it, any solution may quickly become outdated.

The secretariat suggests that the SCT should consider developing agreed standards for determining the presence or absence of secondary liability. These standards should offer an opportunity for stakeholders to achieve a degree of legal and transactional predictability, through developing safe harbour provisions, for example.

Consideration could be given to issues such as the role that is played by the Internet intermediary in relation to alleged trademark infringement, the degree of knowledge and control by the Internet intermediary with respect to the allegedly infringing activity by a user of its services, and the modalities of any response by the Internet intermediary when informed of such activity.

Jürg Burger is counsel with Badertscher Rechtsanwälte AG. He can be contacted at: burger@b-legal.ch

This article was first published on 01 February 2012 in World IP Review