Tech Law Journal Daily E-Mail Alert
August 14, 2002, 9:00 AM ET, Alert No. 491.
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7th Circuit Rules on Use of Trademarks in HTML Metatags
8/13. The U.S. Court of Appeals (7thCir) issued its opinion [PDF] in Promatek v. Equitrak, a trademark case involving HTML metatags. The Appeals Court affirmed a District Court injunction.
Parties. Both Promatek and Equitrac sell cost recovery equipment. That is, they sell systems that enable law firms, accounting firms, and others to automatically capture expenses related to a client, such as photocopies, faxes, phone calls, and couriers, and integrate them into the firm's billing system.
Promatek holds the trademark for "Copitrak". Promatek products are sold under the Copitrak name. Equitrac maintains a web site that employs the use of meta tags in its HTML source code. Equitrac listed the term "Copritrack" in a meta tag.
Meta Tags. Many web pages contain <meta> tags in the <head> section of the html source code. There are a variety of uses of <meta> tags. For example, a hypothetical web page with a news story about this case might include the following in its html source code: <meta name="keywords" content="trademark, infringement, piracy, keyword, deception, Seventh Circuit, metatag, injunction">. In addition to "keyword" metatags, there are "description" metatags, which serve a similar purpose.
This information is not visible on a page viewed with a browser in its normal mode. Most people who surf the web never see this information. However, some search engines use programs that "visit" web sites and read this information to index web pages for their databases. Then, if a person using one of these search engines enters one of the keywords used in a metatag, he might obtain a list of web pages that includes the web page that use that keyword.
One reason for using keyword and description metatags is to assist web users in locating a web page. Another reason is to maximize traffic to a web site. In order to pursue this purpose, some web site operators use deception, such as keywords which have nothing to do with their web pages. (Note: Tech Law Journal wrote an article titled "Keyword Deception Is Common In Political Web Sites" on September 3, 1999.)
District Court. Promatek filed a complaint in U.S. District Court (NDIll) against Equitrac alleging violation of the Lanham Act, and seeking injunctive relief. The District Court granted Promatek's motion for preliminary injunction. The order also required Equitrac to publish the following language in its web site: "If you were directed to this site through the term ``Copitrack,´´ that is in error as there is no affiliation between Equitrac and that term. The mark ``Copitrak´´ is a registered trademark of Promatek Industries, Ltd., which can be found at or"
Appeals Court. The Court of Appeals affirmed. The Court followed the standard three part analysis for issuance of injunctive relief: likelihood of success on the merits, no adequate remedy at law, and irreparable harm if the relief is not granted.
The Court reasoned that there was a likelihood of success on the merits. The claim was for violation of 15 U.S.C. § 1125(a), which requires ownership of a valid mark, and that use of the term is likely to cause confusion among consumers. Hence, the analysis then focused on whether the metatag usage would likely cause confusion. The Court concluded that it would.
Promotek did not present evidence of actual consumer confusion. However, the Court found other factors to be sufficient. The term used was very similar to the trademark. (Equitrac accidentally misspelled it.) Also, the two companies are direct competitors.
The Court continued that "the fact remains that there is a strong likelihood of consumer confusion as a result of its use of the Copitrack metatag. The degree of care exercised by consumers could lead to initial interest confusion. Initial interest confusion, which is actionable under the Lanham Act, occurs when a customer is lured to a product by the similarity of the mark, even if the customer realizes the true source of the goods before the sale is consummated."
The Court relied on the 1999 opinion of the U.S. Court of Appeals (9thCir) in Brookfield Communications v. West Coast Entertainment (174 F.3d 1036). It wrote that "The Ninth Circuit has dealt with initial interest confusion for websites and metatags and held that placing a competitor’s trademark in a metatag creates a likelihood of confusion. In Brookfield Communications, the court found that although consumers are not confused when they reach a competitor’s website, there is nevertheless initial interest confusion. ... This is true in this case, because by Equitrac’s placing the term Copitrack in its metatag, consumers are diverted to its website and Equitrac reaps the goodwill Promatek developed in the Copitrak mark. ... That consumers who are misled to Equitrac’s website are only briefly confused is of little or no consequence." (Citations omitted.)
The Court added that "What is important is not the duration of the confusion, it is the misappropriation of Promatek’s goodwill. Equitrac cannot unring the bell. As the court in Brookfield explained, "[u]sing another’s trademark in one’s metatags is much like posting a sign with another’s trademark in front of one’s store." ... Customers believing they are entering the first store rather than the second are still likely to mill around before they leave. The same theory is true for websites. Consumers who are directed to Equitrac's webpage are likely to learn more about Equitrac and its products before beginning a new search for Promatek and Copitrak." (Citation omitted.)
The Court addressed briefly the other requirements for issuance of a preliminary injunction.
Equitrac's web site continues to use meta tags, but does not list "copitrak". Its home page contains the disclaimer required by the District Court order. 
Charles James Discusses Antitrust Activities
8/13. Charles James gave a speech titled "Rediscovering Coordinated Effects" to a bar group in Washington DC. He reviewed the activities of the Antitrust Division in the last year. He then concluded with a discussion of coordinated effects analysis. James is an Assistant Attorney General in charge of the Department of Justice's Antitrust Division.
James stated that the number of Hart Scott Rodino transactions is way down, and that "The telecommunications and technology sectors have been particularly slow".
He also referenced several technology related matters. For example, he said that "since June 2001, the Division has successfully challenged 18 of the 19 transactions it had deemed anticompetitive. The Division was unsuccessful in seeking to block the Sungard/ Comdisco merger, a transaction the Division asserted was likely substantially to lessen competition in the market for shared hotsite disaster recovery services."
He also said that "this past April, we announced a proposed settlement of a gun jumping complaint against Computer Associates and Platinum Technology, alleging violations of both Section 7A of the Clayton Act and the Sherman Act."
He also briefly touched on the Microsoft case. He said that "the big news this past year in the non-merger area has been our settlement of the Microsoft case. The settlement, together with hearings on separate remedial proposals being advanced by a group of dissident states, is under review by the Court."
He next addressed some of the Antitrust Division's ongoing work. He stated that "we have launched a number of important joint venture investigations involving, among other things, on-line media, financial services and electronic air passenger ticketing. Joint ventures are a high priority for the Division, in part because we believe that many firms are turning to joint ventures as an alternative to full-out mergers, and in part because joint ventures are an important way in which competitors interact with each other in emerging markets."
DOJ FTC Merger Review Agreement. James also discussed his attempt to agree with the Federal Trade Commission (FTC) Chairman Timothy Muris to divide responsibility for merger reviews. The two issued a Memorandum of Agreement in January 2002 concerning clearance procedures for merger reviews and other antitrust matters. The agreement attempted to define, by industry, which transactions would be reviewed by which agency. The agreement was dropped following opposition from, and threats of appropriations cuts by, Sen. Ernest Hollings (D-SC). See, story titled "DOJ & FTC Abandon Merger Review Agreement Under Threat from Sen. Hollings" in TLJ Daily E-Mail Alert No. 436, May 22, 2002.
James stated that "Our landmark but ill fated clearance agreement with the FTC also was part of our process of procedural reform in the merger area. By reducing the time spent in clearance disputes, more time could be spent on actual investigations during the first HSR waiting period. During its brief life, the agreement had reduced clearance to a one day process, and for the first time in decades eliminated all pending clearance disputes. The agreement itself did not change or alter substantive antitrust enforcement, nor did it transfer industry responsibility from one agency to the other. It merely institutionalized in advance the results that should have been dictated by the pre-existing, experience based system."
He concluded that "Much to our disappointment, the agreement had to be voided in May of this year due to the threat of budgetary reprisals against the agencies. Chairman Muris and I, however, remain committed to improving the efficiency and effectiveness of the clearance process. Nevertheless, despite our best efforts, in recent weeks, the average time for clearing matters to the agencies has risen to five days."
Coordinated Effects Analysis. James concluded with a general discussion of coordinated effects and unilateral effects. He said that "we will renew the focus on coordinated effects analysis". He also stated that "unilateral effects should not be the theory of choice simply by default. If we reach too quickly for unilateral effects theories to the exclusion of meaningful coordinated effects analysis, we might miss important cases that should be brought or craft our relief too narrowly in cases that we actually pursue."
He stated that there is a team of lawyers and economists at the Antitrust Division studying coordinated effects. He also stated that "Revisiting the various factors that potentially might affect coordination, and providing additional insight into how such factors might interact with each other, will assist our staffs in identifying solid coordinated effects cases and allow us to more readily develop the evidence we need to prove them in court."
He also rhetorically asked, but did not answer, several questions. He stated: "The age old questions of merger policy still persist. When exactly do market conditions become ripe for coordination and why does this particular merger matter in creating such conditions? Is it enough to demonstrate that the merger will eliminate important constraints upon coordination, or must the government go much further to present a much more detailed story as to how some specific form of post-merger coordination is more likely to occur? What must the government prove and to what level of certainty?"
See also, speech on coordinated effects on April 24, 2002, by Deputy Assistant Attorney General William Kolasky.
DOJ Official Addresses International Competition Network
8/12. William Kolasky gave a speech titled "Can the International Competition Network Help Tame the Growing Multinational Merger Thicket?"
The International Competition Network (ICN) was formed last October by the Department of Justice's Antitrust Division and Federal Trade Commission (FTC) and thirteen other competition agencies from other jurisdictions. It now includes 63 jurisdictions.
Kolasky said that the ICN exists to "provide support for new competition agencies both in enforcing their laws and in building a strong competition culture in their countries", and "to promote greater convergence among these authorities around sound competition principles by working together, and with stakeholders in the private sector, to develop best practice recommendations for antitrust enforcement and competition advocacy that could then be implemented voluntarily by the member agencies."
Kolasky is the Deputy Assistant Attorney General in charge of international antitrust and policy enforcement for the Department of Justice's Antitrust Division. He was previously a partner in the Washington DC office of the law firm of Wilmer Cutler & Pickering. He was appointed to the DOJ in October 2001. See, DOJ release.
Bush Addresses Broadband Deployment
8/13. President Bush spoke about broadband deployment at an event in Waco, Texas. He stated that "In order to make sure the economy grows, we must bring the promise of broadband technology to millions of Americans. My administration is promoting investment in broadband. We will continue to work to prevent new access taxes on broadband technology. If you want something to be used more, you don't tax it. And broadband technology is going to be incredibly important for us to stay on the cutting edge of innovation here in America. The Federal Communications Commission is focusing on policies to encourage high speed Internet service for every home and every business in America. The private sector will deploy broadband. But government at all levels should remove hurdles that slow the pace of deployment." See, transcript.
Bush Addresses Trade Policy
8/13. President Bush spoke about trade policy at an event in Waco, Texas. He stated that "In order to make sure that we continue to grow our economy, we need to be aggressive when it comes to trade policy. Zoellick mentioned to me, he said they're all looking to me. They may be looking to me, Zoellick, I'm looking to you. You're the Trade Representative, you've now got the tools, go out there and start negotiating free trade agreements around the world."  See, transcript.
Bush also addressed the trade promotion authority (also known as fast track) bill which he signed earlier this month. "We're back at the bargaining table as a result of getting the Trade Promotion Authority vote out of the United States Congress. It is essential that we move aggressively, because trade means jobs. More trade means higher incomes for American workers. Listen, a confident nation is one which opens up markets. A nation which isn't confident is one that closes its markets, and puts walls around."
Bush concluded that "I'm confident. I'm confident in the American entrepreneurs, I'm confident in our high tech industry, I'm confident in our farmers and ranchers. I'm confident that when we compete, we're the best in the world, and therefore I want to trade. I want to open up those markets. I want to level those playing fields. Open trade is good for American workers and American families."
Wednesday, August 14
1:00 - 5:00 PM. The Department of Commerce's (DOC) National Telecommunications and Information Administration (NTIA) will host a roundtable meeting regarding the convergence of communications technologies, including the Telephone Number Mapping (ENUM) Protocol that facilitates convergence between the Internet and the public switched telephone network. See, NTIA release, agenda, and notice in the Federal Register. For more information, contact Wendy Lader, NTIA Office of Policy Analysis and Development, at 202 482-1150 or Location: Room 4830, DOC, 1401 Constitution Ave., NW.
3:00 PM. William Lerach of the law firm of Milberg Weiss will hold a press conference regarding CEO and CFO certifications of SEC filings. Lerach focuses on securities class action lawsuits against technology companies. For more information, contact Cara Zarcone at 202 822-5200. Location: First Amendment Room, National Press Club, 529 14th St. NW, 13th Floor.
GAO Reports on Internet Cigarette Sales
8/13. The General Accounting Office (GAO) released a report [60 pages in PDF] titled "Internet Cigarette Sales: Giving ATF Investigative Authority May Improve Reporting and Enforcement".
The report identified 147 web site addresses for Internet cigarette vendors based in the United States. It also concluded that most do not comply with the Jenkins Act, 15 U.S.C. §§ 375-378, which requires that any person who sells and ships cigarettes across a state line to a buyer, other than a licensed distributor, to report the sale to the buyer's state tobacco tax administrator.
This GAO report recommends that "To improve the federal government's efforts in enforcing the Jenkins Act and promoting compliance with the act by Internet cigarette vendors, which may lead to increased state tax revenues from cigarette sales, the Congress should consider providing ATF with primary jurisdiction to investigate violations of the Jenkins Act".
The report was prepared for Rep. John Conyers (D-MI) and Rep. Marty Meehan (D-MA). Rep. Meehan has also sponsored legislation to regulate Internet tobacco sales. See, TLJ story titled "Rep. Meehan Introduces Bill to Ban Internet Sales of Tobacco to Minors", September 27, 1999. 
More News
8/13. The U.S. Patent and Trademark Office (USPTO) announced that it will discontinue paper publication of the Official Gazette of the United States Patent and Trademark Office - Patents after the September 24, 2002 issue. See, USPTO release.
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