|Appeals Court Rules There is No
Cybersquatting Claim When Registered Mark is Held to Be Generic
4/13. The U.S. Court of Appeals
(4thCir) issued its
pages in PDF] in
Retail Services v. Freebies Publishing, a trademark and
Anticybersquatting Consumer Protection Act
(ACPA) case, in which the Appeals Court affirmed the District Court
judgment for the alleged cybersquatter.
The plaintiffs below, and appellees before the Appeals Court, are Retail
Services, Inc. and Freebie Inc. (RSI). RSI registered the domain freebie.com in
1995. RSI provides customer management services to retailers, that profile
customers making retail purchases. The Appeals Court wrote that "When a customer
makes a purchase from an RSI client, the RSI product enables information to be
sent from the point of sale to RSI’s database of customer transactions. The
system then instantaneously identifies a potential ``incentive offer,´´
described by RSI as ``a freebie,´´ which is printed out and presented to the
customer along with the purchase receipt."
Defendants registered the domain name freebies.com in 1997. In 1979, the
defendants purchased the right to publish a paper periodical titled "Freebies
Magazine", which provided information about free mail-order offerings. The
previous owner has registered the mark FREEBIES. The defendants allowed the mark
to lapse. They latter applied for a new registration, which they ultimately got.
In 2001, defendants demanded that RSI stop using the domain freebie.com. RSI
refused. Defendants instituted a proceeding pursuant to the
Uniform Domain Name Dispute Resolution
Policy (UDRP). The arbitrator, finding bad faith registration, ordered RSI to
transfer the domain to defendants.
Retail Services, Inc. and Freebie Inc. (RSI) filed a complaint in U.S.
District Court (EDVa) against Freebies Publishing, and others, seeking a
declaratory judgment that (1) its use of the domain freebie.com does not
violation the ACPA, (2) its use of freebie in it domain name does not infringe
defendants' trademark, and (3) defendant's
mark is generic and therefore not protectible as a trademark.
The defendants filed a counterclaim alleging
trademark infringement, cybersquatting in violation of the ACPA, unfair
competition, trademark dilution, and violation of Virginia law.
The District Court granted summary judgment to
RSI on the grounds that freebies is generic, and not entitled to trademark
The Appeals Court affirmed. It provided an
extensive analysis of the meaning of generic, and concluded, like the District
Court, that freebie is generic.
The Appeals Court also affirmed the District Court's analysis of the
Anticybersquatting Consumer Protection Act
(ACPA) claims. The ACPA, which is codified at 15 U.S.C.A. § 1125(d)(1),
provides the "owner of a mark" a cause of action against anyone who registers,
traffics in, or uses a domain name that is identical or confusingly similar to
the owner's mark, with a bad faith intent to profit from the goodwill associated
with that mark.
The Appeals Court reasoned that "We need go no farther than the district
court’s initial conclusion that defendants cannot state a claim under the ACPA without a
valid trademark." It continued that "a prerequisite for bringing a claim under
the ACPA is establishing the existence of a valid trademark and ownership of that mark.
As we have already determined that ``freebies´´ is generic and not entitled to trademark
protection, defendants cannot surmount this threshold barrier".
This case is Retail Services, Inc. and Freebie, Inc. v. Freebies Publishing,
et al., U.S. Court of Appeals
for the 4th Circuit, App. Ct. Nos. 03-1272 and 03-1317, appeals from the U.S.
District Court for the Eastern District of Virginia, Judge Leonie Brinkema
|Local Phone Companies Offer Support
for DOJ's Petition to Expand CALEA to Cover Information Services
4/13. The Federal Communications Commission (FCC)
published in its web site more comments submitted in response to the
Department of Justice's (DOJ) March 10
petition for rulemaking
[83 pages in PDF] regarding requiring broadband service providers, voice over internet
protocol (VOIP) providers, and others, to design and modify their networks,
hardware, software, and equipment in a manner that enables the law enforcement
agenciers to intercept communications.
April 12 was the deadline for initial comments. The deadline for reply
comments is April 27. The DOJ asserts, among other things, that the
Communications Assistance for Law Enforcement Act (CALEA), a 1994 statute
that provides that a "telecommunications carrier" must design its network to
facilitate wiretapping, also applies to information services, including
broadband internet access and VOIP services and applications.
Comments reflect that the DOJ's petition is strongly supported by law
enforcement agencies and groups that represent them, and by vendors of
surveillance and interception products.
In contrast, the petition is widely criticized and/or opposed by most
industry sectors, including ISPs (Earthlink and ISP CALEA Coalition), IXCs (MCI
WorldCom and AT&T), a VOIP
application provider (Skype), a broadband over powerline group (UPL Council),
and wireless carriers (Sprint and CTIA). It is also opposed by groups that
advocate various broad public interests -- CDT (democracy and technology), EPIC
(privacy), Privacilla.org (privacy), ACLU (civil liberties), and EFF.
However, the petition has received some support, or at least non-opposition,
from one industry sector -- local phone companies.
For example, Verizon submitted a
[28 pages in PDF] that reveals much agreement with the DOJ petition. Verizon argues
that "voice over IP and broadband access services
fall within the scope of CALEA." It further argues that they meet the CALEA's
definition of "telecommunications carrier".
Moreover, Verizon argues that this
is the case "for all of these services, including voice over IP application
providers. For example, if a carrier is simply providing the underlying
transport service (e.g., DSL) and an application provider is providing the voice
over IP, that application provider should have the CALEA obligation to provide
law enforcement with information about the calls using its service, including
the call-identifying information."
Verizon, which provides broadband access via DSL, also argues
that application of the CALEA to broadband access service should extend
not only to DSL service providers, but also to "cable companies and other
Verizon notes that "The Petitioners suggest that the Commission adopt
a ``presumption´´ that any service that ``directly competes´´ against a service
already deemed to be covered by CALEA is also subject to CALEA." It states that
Verizon "generally agrees that in many instances such services would fall within
CALEA because a competing service presumable would meet the statutory
substantial replacement standard ..." But, it adds that "An absolute categorical
rule to that effect is unnecessary, however, and should not be adopted. Such a
standard could stifle innovation ..."
Verizon also addresses the DOJ's request that all new
technologies must be pre-approved by the government. Its discussion is vague,
but in the final analysis, it supports the DOJ, with qualifications.
On the issue of CALEA compliance cost recovery, Verizon argues
that in some situations the government should provide compensate. Otherwise, it
argues that companies should be free to pass on costs to customers. (The DOJ
argued that there is no government responsibility, and that the FCC should
determine which costs companies can recovery from customers.)
SBC, another Regional Bell
Operating Company, submitted a
comment [21 pages in PDF]. (Both Verizon's and SBC's comments were prepared
by attorneys at the law firm of Wilmer Cutler & Pickering.)
SBC does not either oppose, or support, many of the positions taken
by the DOJ in its petition. Rather, it urges the FCC to proceed with caution and care,
and to develop a full
factual record before ruling.
While SBC takes no position on whether VOIP is covered by CALEA,
it predicts "the likelihood that the Commission will
conclude that CALEA applies to some applications of broadband telephony..."
SBC does oppose the DOJ petition on two key points, that any
service that competes with a service that has been deemed to be covered by CALEA
is also covered by CALEA, and that all future technologies must be approved by
the government. SBC states that the FCC "should reject these proposals".
SBC's arguments regarding cost recovery parallel those of
The U.S. Telecom Association (USTA), which represents RBOCs, submitted a
comment [19 pages in PDF]. It argues that the FCC must act by NPRM, not by
declaratory ruling. It also opposes the DOJ's request that future technologies
must be pre-approved by the FCC.
The USTA does not take a position regarding whether or not
broadband access service, or VOIP, should be covered by the CALEA.
In contrast, BellSouth submitted a
pages in PDF] which opposes the DOJ across a wider range of issues. First, it
too argues that the FCC should act by NPRM, not declaratory ruling.
BellSouth continues that the DOJ's proposals "are overly broad as written and
clearly exceed the limited scope of the CALEA. For example, the Petitioners'
proposal to require carriers to comply with benchmarks and strict compliance
deadlines is not only inconsistent with the statute but also unnecessary and
It also argues that the "CALEA does not permit the Commission to subject information
services to the CALEA." It further argues the "authority to designate certain
entities as telecommunications carriers under Section 1001(8)(B)(ii) is limited" and
that the FCC's "authority under this provision is very narrow, contrary to
the suggestions of the Petitioners". This is not an outright opposition to
the argument that broadband access and VOIP are subject to CALEA (as advocated
by the DOJ and Verizon), or even a neutral position (SBC and USTA); it
distinguishes BellSouth from the others.
BellSouth also writes that the DOJ's "attempt to classify all current
and future broadband access and broadband telephony as services subject to CALEA
significantly overreaches. Moreover, the Petitioners' proposal to require carriers to
file petitions for clarification with the Commission to determine whether current or
planned equipment, facilities, or services are subject to CALEA is not only
inconsistent with the statute but also unreasonable in today's rapidly evolving
BellSouth adds that "Adoption of the Petitioners's proposals
would severely hamper innovation and deprive consumers of new and improved
broadband technologies, features and services." On this point, BellSouth
states the same position as SBC and the USTA, but does so with more vehemence.
BellSouth also argues that CALEA enforcement lies with the federal courts,
not the FCC and FBI.
|Sen. Frist Addresses Outsourcing
4/8. Sen. Bill Frist (R-TN), spoke in
the Senate about outsourcing, trade, exports and frivolous lawsuits.
Sen Frist (at left) stated that "Critics contend that a company's effort to
deliver a product or service more cheaply and efficiently to the American consumer
is hurting our economy and hurting America's workers. Indeed, this has become
fodder for sound bites that I think are not justified and thus want to take a
few moments to talk more broadly about what outsourcing is and what it is not."
But, he said, "I should begin by starting with the flip side of outsourcing
and that is insourcing. What is ``insourcing´´? What is this phenomenon of
insourcing? Well, it has been a company such as Nissan opens a plant in the
United States and thereby creates high-paying jobs for American workers to the
benefit of those American workers. In fact, that is the very thing that happened
in Tennessee when, in 1980, Nissan opened its first plant in Smyrna."
He continued that "There is a second aspect to this whole discussion of world
trade that has gotten overlooked in the debate, and that is the growth of
American exports. Again, Tennessee has been a major beneficiary of the opening
of foreign markets. ... Even more notably, export-supporting jobs paid 13 to 18
percent more on average than nonexport jobs. Our focus should be to expand
economic growth and promote higher wages, not to impose sanctions and
restrictions on America's job creators."
He then discussed the role of job training programs. Finally, he discussed at
great length an issue that he argued is harming the U.S. economy -- "frivolous
He said that "Every day we encourage America's job creators to grow and
expand and to compete in this world market. Yet at the same time we are
burdening them with unnecessary, and I would argue unfair, litigation practices
that ultimately amount to a hefty tax, which makes them less competitive in the
See, Congressional Record, April 8, 2004, at Pages S4006-7.
|Sen. Clinton Introduces Bill That Mixes
Trade Protectionism and Data Privacy
4/8. Sen. Hillary Clinton (D-NY) and
Sen. Mark Dayton (D-MN) introduced
the "SAFE-ID Act". The bill bears some attributes of a data privacy
protection proposal, and some attributes of a proposal to impose protectionist
barriers to trade in services.
The bill was referred to the
Senate Commerce Committee, which has jurisdiction over data privacy
legislation, but not to the Senate
Finance Committee, which has jurisdiction over trade bills.
The bill provides that "A business enterprise may transmit personally
identifiable information regarding a citizen of the United States to any foreign
affiliate or subcontractor located in a country that is a country with adequate
It further states that "A business enterprise may not transmit personally
identifiable information regarding a citizen of the United States to any foreign
affiliate or subcontractor located in a country that is a country without
adequate privacy protection unless-- (1) the business enterprise discloses to
the citizen that the country to which the information will be transmitted does
not have adequate privacy protection; (2) the business enterprise obtains
consent from the citizen, before a consumer relationship is established or
before the effective date of this Act, to transmit such information to such
foreign affiliate or subcontractor ..."
The bill then defines a "country with adequate privacy protection"
as "a country that has been certified by the Federal Trade Commission as having
a legal system that provides adequate privacy protection for personally
identifiable information". The bill does not define "adequate privacy
protection", although the term does have meaning under EU data privacy law.
The bill would require the FTC to write rules of general application
regarding "adequate privacy protection". These rules would then have only
A majority of the Commissioners of the FTC have expressed opposition to
legislation setting general privacy standards. Also, the FTC has declined to
engage in such a rule making proceeding based upon its existing unfair and
deceptive trade practices authority.
Moreover, the FTC, both in its consumer protection efforts, and in its
competition enforcement efforts, seeks cooperation from foreign
governments, and increased international comity. Placing the FTC in the
position of writing rules that impose trade barriers, and issuing nation
specific determinations of non-compliance with those rules, could undermine its
efforts in the areas of consumer protection and antitrust enforcement.
It is unlikely that FTC Chairman Timothy Muris would testify in support of
this bill, if any Committee holds a hearing on this bill.
On the other hand, this bill, if enacted, might incent countries that do not
have data privacy laws, and that seek trade in services with the U.S., to enact
This bill, in addition to giving the FTC general privacy authority, would
give the Department of Health and Human Services industry specific rule making
authority with respect to health information privacy.
This bill would also create a private right of action. The language of the
bill is both broad and vague. There is no bar on class action lawsuits. The bill does
not identify who has standing to sue. Nor is there a requirement that any individual
actually be injured by a violation of the statute. Any "improper storage,
duplication, sharing, or other misuse of personally identifiable information"
would give rise to a private right of action. The bill does not define "improper
storage", "duplication" or "misuse".
The bill provides that "A country that has comprehensive privacy laws that
meet the requirements of the European Union Data Protection Directive shall be
certified" by the FTC. However, the bill also provides an exception: "unless the
Federal Trade Commission determines that such laws are not commonly enforced
within such country". Hypothetically, this means that the FTC would could
decertify an EU nation on the basis that it does not commonly enforce the EU
This bill is a creative combination of privacy and trade issues, that may
have been introduced for the purposes of political debate during an election
While the bill may receive support from privacy advocates, trade protectionists,
trial lawyers, and advocates of exploiting outsourcing concerns during an election year,
it may also encounter opposition from advocates of tort reform, advocates of free
trade, advocates of rural telemedicine, advocates of lower health care costs,
information technology companies, and a variety of industry sectors that have an
interest in offshore outsourcing of services, including health care, banking and
other financial services, retailers, and others.
Also, the bill would impose barriers to trade with service providers located in
other countries, while not also imposing the same restrictions upon transactions
with providers in the U.S.. Thus, if enacted into law, it would be vulnerable to
attack as a violation of U.S. treaty obligations.
|Washington Tech Calendar
New items are highlighted in red.
|Wednesday, April 14
The House is in recess until Monday, April 19, 2004.
The Senate is in recess until April 19, 2004.
The Supreme Court is in
recess until April 19, 2004.
12:15 PM. The
Federal Communications Bar Association's (FCBA)
Cable Practice Committee will host a brown bag lunch. The speaker will be Ken Ferree,
Chief of the Federal Communications Commission's (FCC)
Media Bureau. RSVP to Quyen Truong at
Dow Lohnes & Albertson, 1200 New Hampshire
Ave., NW, Eighth Floor.
Day three of a three day conference hosted by the
National Institute of Standards and Technology
(NIST), National Institutes of Health (NIH), Internet2, USENIX, and OASIS
titled "Public Key Technology R&D Workshop". See,
and conference website.
The price to attend is $105. Location: NIST, Gaithersburg, MD.
|Thursday, April 15
9:30 AM. The Federal Communications
Commission (FCC) will hold a meeting. See,
agenda [PDF]. The event will be webcast.
Location: FCC, 445 12th Street, SW, Room TW-C05 (Commission Meeting Room).
9:30 AM - 12:00 NOON. The WRC-07 Advisory Committee's Informal Working
Group 4: Broadcasting and Amateur Issues will meet. See, FCC
notice [PDF]. Location: Shaw Pittman,
2300 N Street, NW.
9:30 AM. The U.S. Court Appeals (DCCir)
will hear oral argument in AT&T v. FCC, No. 03-1035. Judges
Edwards, Tatel and Sentele will preside. Location: Prettyman Courthouse, 333
12:00 NOON. The
Progress & Freedom Foundation (PFF) will host a luncheon titled "Should
Spectrum Be Public or Private?". The speakers will be
Benjamin (Duke University Law School), Randolph May (PFF), Peter Pitsch
(Intel), and Stuart Buck (Kellogg Huber). See,
page. Location: Room 192, Dirksen Building, Capitol Hill.
12:00 NOON - 1:30 PM. The Open Source and
Industry Alliance (OSAIA) will host a luncheon briefing on open source
software. The speakers will be representatives of IBM, Novell, OSAIA, the
Open Source Development Lab, and Red Hat. RSVP to Pat Steckler (OSAIA) at 202
783-2942. Location: Room B-354, Rayburn Building, Capitol Hill.
12:30 PM. The
Federal Communications Bar Association's (FCBA)
Diversity Committee will hold a brown bag lunch. Natalie Ludaway will speak on
"the benefits of launching a legal career at a small law firm and establishing
and maintaining a diverse client base". For more information, contact Joy
Ragsdale at 202 261-1427 or email@example.com.
RSVP by April 12, 2004 to Angela Bushnell at at 202 434-9121 or
Location: Leftwich & Ludaway, 1401 New York Ave., NW.
2:00 - 4:00 PM. The WRC-07 Advisory Committee's Informal Working Group 2:
IMT-2000 and 2.5 GHz Sharing Issues will meet. See,
notice [PDF]. Location: FCC, 445 12th Street, SW, South Conference Room
(6th Floor, Room 6-B516).
|Friday, April 16
8:30 AM - 4:30 PM. The
New America Foundation will host a
conference titled "Pervasive Connectivity: How Unlicensed Spectrum Will Help
The World Go Wireless". The event is free. RSVP to Matt Barranca at
firstname.lastname@example.org or 202 986-2700.
Location: National Guard Association of the United States, One Massachusetts
|Monday, April 19
The House will return from its Spring/Easter recess.
The Senate will return from its Spring/Easter recess.
The Supreme Court will return
from the recess that it began on April 5.
The Intellectual Property Owners Association
(IPO) will host an event titled "Patent Quality Conference". For more
information, contact 202 466-2396 or
email@example.com. Location: Ronald Reagan Building and International Trade Center.
Deadline to submit comments to the
Federal Communications Commission (FCC) in
response to its notice of proposed rulemaking (NPRM) regarding whether certain
rules should be repealed or modified because they are no longer necessary in
the public interest. The FCC released this NPRM on January 12, 2004. This item
is FCC 03-337 in WC Docket No. 02-313. See,
notice in the Federal Register, March 18, 2004, Vol. 69, No. 53, at Pages
|Tuesday, April 20
Supreme Court will hear oral
argument in Intel v. AMD, a case regarding the availability of a discovery
order from a U.S. District Court, pursuant to 28 U.S.C. § 1782, for a
complainant in an antitrust matter before the European Commission. See,
Order List [8 pages in PDF] at page 1. See,
titled "Supreme Court Grants Certiorari in Intel v. AMD", also
published in TLJ
Daily E-Mail Alert No. 776, November 11, 2003; and story titled "9th
Circuit Rules on Discovery in U.S. for EC Antitrust Proceeding" in
TLJ Daily E-Mail
Alert No. 446, June 7, 2002.
1:00 - 5:00 PM. The U.S. Patent and
Trademark Office's (USPTO) Nanotechnology Customer Partnership will
meet. RSVP to Jill Warden at 571 272-1267 or
Location: Conference Center, Rooms 1D70 and 1D80, Jefferson Building, 500 Dulany
Street, Alexandria, VA.
Extended deadline to submit comments to the
Federal Trade Commission (FTC) in response
notice in the Federal Register requesting comments regarding a National Do
Not E-mail Registry. Section 9 of
S 877, the
"Controlling the Assault of Non-Solicited Pormography and Marketing Act of
2003" (CAN-SPAM Act), requires the FTC to write a report to the Congress on
establishing a nationwide Do Not E-Mail Registry. It is due by June 16, 2004.
See, story titled "FTC Announces CAN-SPAM Act Rulemaking" in TLJ Daily E-Mail
Alert No. 855, March 15, 2004. The
(setting the original comment deadline of March 31, 2004) is published in the Federal
Register, March 11, 2004, Vol. 69, No. 48, at Pages 11775-11782. See also, FTC
the notice. The
notice (extending the deadline to April 20, 2004) is published in the Federal
Register, April 9, 2004, Vol. 69, No. 69, at Pages 18851 - 18852.
|Wednesday, April 21
7:45 AM. The Federal Communications Bar
Association (FCBA) will host a breakfast. The speaker will be
John Rogovin, General Counsel
of the Federal Communications Commission (FCC).
Prices vary. The buffet will begin at 7:45 AM. Location:
Mayflower Hotel, 1127 Connecticut Avenue, NW.
10:00 AM. The
House Financial Services
Committee's (HFSC) Subcommittee on Capital Markets will hold a hearing to
evaluate the Financial Accounting Standards Board's (FASB) exposure draft on
share-based payments, or stock options, and its effects on publicly
traded companies. See,
HFSC release. Location: Room 2128, Rayburn Building.
12:00 NOON. The Federal
Communications Bar Association's (FCBA) Transactional Practice Committee will host
a brown bag lunch titled "M&A Opportunities in Telecom & Media".
The speakers will be Michael Price (Evercore Partners) and Chuck Wiebe (BIA Capital).
RSVP to Ava Smith 202 371-7201 or
firstname.lastname@example.org. Location: Skadden
Arps, 700 14th St., NW, 11th Floor.
1:00 - 5:00 PM. Day one of a three day
meeting of the National Commission on
Libraries and Information Science (NCLIS) will hold a meeting. See,
notice in the Federal Register, April 12, 2004, Vol. 69, No. 70, at Page
19240. Location: 1110 Vermont Avenue, NW, Suite 820.
Deadline to submit comment to the
National Institute of Standards and Technology's
(NIST) Computer Security Division (CSD)
regarding its "Pre-Publication Final"
draft [67 pages in PDF] of NIST Special Publication 800-37, titled "Guide
for the Security Certification and Accreditation of Federal Information
Systems". Comments should be addressed to
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