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March 18, 2009, Alert No. 1,914.
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9th Circuit Addresses Trademark Infringement in Domain Names

3/17. The U.S. Court of Appeals (9thCir) issued its divided opinion [25 pages in PDF] in Internet Specialties West v. Milon-Digiorgio Enterprises, a trademark case involving domain names. The Court of Appeals upheld the District Court's judgment for the trademark holder.

This opinion will make it easier under certain circumstances for trademark holders to belatedly obtain injunctions against others who have long and unwittingly used the trademarks in domain names.

Both Internet Specialties West, Inc. (ISWest) and Milon-DiGiorgio Enterprises, Inc. (MDE) are internet service providers that offer internet access, e-mail service, web hosting, and other services.

ISWest uses the domain name ISWest.com, which it registered in 1996. MDE registered and commenced use of the domain name ISPWest.com in 1998. ISWest was aware of MDE in 1998. At that time ISWest was national, while MDE operated only in Southern California. The services offerings were not identical. Only one initially offered DSL service.

Nevertheless, ISWest took no action regarding MDE's use of the domain name ISPWest.com until 2005, when it sent a cease and desist letter demanding that MDE stop using the domain name.

MDE has customers that use e-mail addresses with ISPWest.com as the domain name. Hence, both MDE and some of its customers would be harmed by a termination of the use of the domain name.

ISWest filed a complaint in U.S. District Court (CDCal) against MDE alleging trademark infringement in violation of Section 43(a) of the Lanham Act, which is codified at 15 U.S.C. § 1125(a)(1).

The trial jury returned a verdict of infringement, but found no damages. The District Court rejected MDE's defense of laches (delay), and issued an injunction against MDE barring it from using the domain name. (Injunction is a species of equitable relief, and is therefore a matter to decided by the court rather than by the jury, which renders verdicts on legal issues.)

MDE brought the present appeal. The Court of Appeals affirmed in full.

First, the Court of Appeals upheld the District Court's use of the following jury instruction:

    "In an Internet case such as this one, the law considers three of these factors to be of greatest importance: (i) similarity of plaintiff's and defendant's mark; (ii) relatedness of services; and (iii) simultaneous use of the Internet as a marketing channel.

    Therefore, if you find that the names ``ISWest´´ and ``ISPWest´´ are confusingly similar, and that the services offered by the plaintiff and defendant are related, and that both the plaintiff and the defendant use the Internet as a marketing channel, then you should find that the plaintiff has proven there is a likelihood of confusion as I have instructed you unless you find that the remaining factors weigh strongly in the defendant's favor."

Second, the Court of Appeals upheld the District Court rejection of the laches defense. It held that "Laches is an equitable defense to Lanham Act claims", and that it provides that "a plaintiff cannot sit on the knowledge that another company is using its trademark, and then later come forward and seek to enforce its rights."

It held that "The test for laches is two-fold: first, was the plaintiff’s delay in bringing suit unreasonable? Second, was the defendant prejudiced by the delay?"

As for unreasonableness of delay, the Court of Appeals wrote that "The limitations period for laches starts when the plaintiff ``knew or should have known about its potential cause of action.´´" (Citation omitted.)

However, in this case, since the overlap in product offerings increased after 1998, the parties debated when there arose a likelihood of confusion, and hence a cause of action. The Court of Appeals concluded, unlike the District Court, that a likelihood of confusion existed from 1998, because both companies offered some type of internet access, e-mail service, and web hosting at that time. Hence, the Court of Appeals found that the presumption of laches does apply.

It then proceeded to the question of whether the delay caused prejudice to the defendant. It held that it did not; the defense of laches fails; therefore, ISWest gets its injunction.

The Court of Appeals noted that during ISWest's delay, MDE only grew its customer base from 2,000 to 13,000 customers, and that it "did not spend the time in the interim developing brand recognition of its mark".

Finally, the Court of Appeals upheld the scope of the District Court's injunction.

Judge Kleinfeld wrote a long and adamant dissent on the matter of issuing equitable relief to a party who has so long delayed. He criticized the majority's prejudice to the defendant analysis.

This opinion "defies Supreme Court precedent", wrote Kleinfeld. "We have now enunciated a new and unfair standard for prejudice in trademark law."

This case is Internet Specialties West, Inc. v. Milon-Digiorgio Enterprises, Inc., U.S. Court of Appeals for the 9th Circuit, App. Ct. Nos. 07-55087 and No. 07-55199, appeals from the U.S. District Court for the Central District of California, D.C. No. CV-05-03296-FMC, Judge Florence-Marie Cooper presiding. Judge Betty Fletcher wrote the opinion of the Court of Appeals, in which Judge Johnnie Rawlinson joined. Judge Andrew Kleinfeld wrote a dissent.

GAO Reports on IT Security Weaknesses at SEC

3/17. The Government Accountability Office (GAO) released a report [PDF] titled "Information Security: Securities and Exchange Commission Needs to Consistently Implement Effective Controls".

The report states that the Securities and Exchange Commission (SEC) "relies extensively on computerized systems".

It finds that in addition to the 16 weaknesses that it identified in its last report that remain uncorrected, it identified "23 new weaknesses in controls intended to restrict access to data and systems, as well as weaknesses in other information security controls, that continue to jeopardize the confidentiality, integrity, and availability of SEC's financial and sensitive information and information systems."

The GAO report concludes that "Previously reported and newly identified weaknesses hinder the commission's ability to perform vital functions and increase the risk of unauthorized disclosure, modification, or destruction of financial information. A key reason for these weaknesses was that SEC did not fully implement key activities of its information security program."

Mexico Retaliates Against US Protectionism

3/15. Arturo Sarukhan, the Ambassador of Mexico to the U.S., stated in a release that "free and fair trade hit another red light this past week. The U.S. Congress, which has now killed a modest and highly successful U.S.-Mexico trucking demonstration program, has sadly left my government no choice but to impose countermeasures after years of restraint and goodwill."

He continued that "Then and now, this was never about the safety of American roads or drivers; it was and has been about protectionism, pure and simple." He reviewed Mexico's failed efforts over ten years to obtain U.S. compliance with the North America Free Trade Agreement (NAFTA).

He added that Mexico "has had no alternative but to respond by raising tariffs on 90 U.S. products that account for approximately $2.4 billion in trade".

However, he did not specify which U.S. products would be taxed.

This dispute is not yet technology related. The U.S. unilaterally violated the NAFTA for the purpose of benefiting the trucking related activities of the Teamsters Union, which supported President Obama in the 2008 primary and general elections.

U.S. information technology companies and U.S. consumers are dependent upon, and benefit from compliance with free trade agreements that facilitate, exports and imports of IT products and services.

President Obama is scheduled to visit Mexico on April 16 and 17, 2009. See, Office of the President of Mexico release.

More Trade News

3/18. The Senate confirmed Ron Kirk to be the head of the Office of the U.S. Trade Representative (OUSTR) by a vote of 92-5. See, Roll Call No. 100, and OUSTR release. He wrote in his prepared testimony for his March 9, 2009, confirmation hearing that he wants other countries to open their markets to U.S. exports.

3/17. President Obama sent a statement to the Congress in which he announced that "I hereby certify to the Congress that the export of fine grain graphite to be used for solar cell applications and for the fabrication of components used in electronic and semiconductor fabrication, and two dual-motor, dual-shaft mixers to be used to produce carbon fiber and epoxy prepregs for the commercial airline industry is not detrimental to the U.S. space launch industry, and that the material and equipment, including any indirect technical benefit that could be derived from these exports, will not measurably improve the missile or space launch capabilities of the People's Republic of China."

Obama Nominates Hamilton for 7th Circuit

3/17. President Obama nominated Judge David Hamilton to be a Judge of the U.S. Court of Appeals (7thCir). He has been a Judge of the U.S. District Court (SDInd) since 1994. See, White House news release.

The White House press office stated that he has the support of both Sen. Evan Bayh (D-IN) and Sen. Richard Lugar (R-IN). See also, Sen. Bayh's release.

Hamilton presided in Simon Property Group, L.P. v. mySimon, Inc., D.C. No. IP 99-1195-C H/G. This was a Lanham Act case brought by a bricks and mortar real estate manager against a comparison shopping web site. See, Hamilton's opinion.

The Court of Appeals dismissed for lack of jurisdiction. See, story titled "7th Circuit Comments on Jury Verdict in mySimon Trademark Case" in TLJ Daily E-Mail Alert No. 388, March 14, 2002.

He also presided in Eco Manufacturing v. Honeywell, D.C. No. No. 1:03-CV-0170-DFH, a case in which a company whose patent protection had run out sought continuing protection under trademark law. The Court of Appeals affirmed. See, "More News" in TLJ Daily E-Mail Alert No. 812, January 9, 2004.

More People and Appointments

3/17. President Bush nominated Demetrios Marantis to be a Deputy United States Trade Representative. See, White House news office release and release. He is Chief International Trade Counsel for the Senate Finance Committee (SFC). He is also a former employee of the OUSTR, and of the law firm of Akin Gump.

3/10. The Senate confirmed Austan Goolsbee and Cecilia Rouse to be members of the President's Council of Economic Advisors. See, Congressional Record, May 10, 2009, at Page S2989.

3/17. Harold Feld joined the Public Knowledge (PK) as Legal Director. He previously worked for the Media Access Project (MAP) for a decade. He will handle issues before the Federal Communications Commission (FCC). See, PK release.

More News

3/18. The Computer and Communications Industry Association (CCIA) stated in a release that "IBM is reportedly in merger talks with Sun Microsystems Inc. These high tech giants have several overlapping products and services and are key players in numerous markets, including the critical server market, and a merger will impact the key area of cloud computing." Ed Black, head of the CCIA, stated in this release that "IBM's continued monopoly dominance of the high end computer market is a key factor and starting point in any analysis of this proposed deal." He continued that "IBM has been under federal supervision for decades because of anticompetitive behavior. This potential merger has the attention of many tech companies and others who might wind up with fewer choices in computer services. We expect it will be scrutinized by all who use tech products, and all who care about a competitive, innovative business environment and its role in the economy."

3/17. The U.S. Court of Appeals (4thCir) issued its opinion [18 pages in PDF] in Robinson v. Equifax, a Fair Credit Reporting Act (FCRA) case regarding a credit reporting service's repeated failures to make corrections to its credit reports of an identity theft victim. Equifax sent to creditors both Robinson's credit file and those of the identity thief, and she was denied credit as a result. When Equifax was notified of its errors, it continued made more errors. The Court of Appeals opinion relates further efforts by Robinson, further errors by Equifax, and further denials of credit. Robinson filed a complaint in the U.S. District Court (EDVa) after years of errors, alleging violation of the FCRA. The jury returned a verdict of $200,000 in actual damages, and the District Court awarded $268,652.25 in attorneys fees. This was based upon $425 per hour for the work of a partner, and $305 per hour for an associate. The Court of Appeals affirmed the District Court as to violation of the FCRA, and the award of actual damages, but vacated and remanded the award of attorneys fees. This case is Nicole Robinson v. Equifax Information Services, LLC, U.S. Court of Appeals for the 4th Circuit, App. Ct. Nos. No. 07-2094, 07-2098, and 07-2100, appeals from the U.S. District Court for the Eastern District of Virginia, at Alexandria, D.C. No. 1:06-cv-01336, Judge Gerald Bruce Lee presiding.

In This Issue

This issue contains the following items:
 • 9th Circuit Addresses Trademark Infringement in Domain Names
 • GAO Reports on IT Security Weaknesses at SEC
 • Mexico Retaliates Against US Protectionism
 • Obama Nominates Hamilton for 7th Circuit

Washington Tech Calendar
New items are highlighted in red.
Thursday, March 19

The House will meet at 10:00 AM for legislative business. See, Rep. Hoyer's schedule for week of March 16.

9:00 AM - 5:00 PM. Day two of a two day hearing of the Federal Trade Commission (FTC) titled "The Operation of IP Markets". At 9:30 - 11:30 AM, there will be a panel titled "Economic Perspectives on IP and Technology Markets". At 1:00 - 5:15 PM, there will be a panel titled "Fulfilling the Patent System's Public Notice Function". See, notice and agenda [PDF]. Location: FTC Conference Center, 601 New Jersey Ave., NW.

9:30 AM. The U.S. Court of Appeals (DCCir) will hear oral argument in Intercollegiate Broadcasting System v. Copyright Royalty Board, App. Ct. No. 07-1123. Judges Sentelle, Rogers and Griffith will preside. Location: 333 Constitution Ave.

10:00 AM. The House Appropriations Committee's (HAC) Subcommittee on Homeland Security will hold a hearing titled "Biometric Identification". Location: Room 2362-B, Rayburn Building.

10:00 AM. The House Appropriations Committee's (HAC) Subcommittee on Financial Services will hold a hearing titled "The Judiciary Budget". Location: Room 2220, Rayburn Building.

10:00 AM. The Senate Judiciary Committee (SJC) may hold an executive business meeting. The agenda includes consideration of the nomination of Dawn Johnson to be Assistant Attorney General in charge of the Office of Legal Counsel (OLC). It also includes consideration of S 515, the "Patent Reform Act of 2009". The SJC rarely follows is agendas. See, notice. Location: Room 226, Dirksen Building.

10:00 AM. The Senate Commerce Committee (SCC) will hold a hearing titled "Cybersecurity: Assessing Our Vulnerabilities and Developing an Effective Defense". See, notice. Location: Room 253, Russell Building.

10:00 AM. The National Telecommunications and Information Administration (NTIA) and the Rural Utilities Service (RUS) will hold the second in a series of meetings regarding the broadband grant programs created by HR 1 [LOC | WW], the huge spending bill enacted in February, which programs are also known as the Broadband Technology Opportunities Program (BTOP). See, notice in the Federal Register, March 12, 2009, Vol. 74, No. 47, at Pages 10716-10721. Location: Department of Commerce, 1401 Constitution Ave., NW.

10:00 AM. The House Science Committee (HSC) will hold a hearing titled "Follow the Money: Accountability and Transparency in Recovery Act Science Funding". See, notice. Location: Room 2318, Rayburn Building.

2:00 - 6:00 PM. The Federal Communications Bar Association's (FCBA) Privacy and Data Security Committee and the American Bar Association's (ABA) Forum on Communications Law will host an event titled "4th Annual ABA/FCBA Privacy & Data Security for Communications and Media Companies CLE". For more information, contact Jenell Trigg at STrigg at lermansenter dot com or 202-416-1090) or Bryan Tramont at BTramont at wbklaw dot com or 202-383-3331. Registrations are due by 12:00 NOON on February 17. Location: Wiley Rein, 1776 K St., NW.

Friday, March 20

Rep. Hoyer's schedule for week of March 16 states that no votes are expected in the House.

12:15 - 1:45 PM. The Federal Communications Bar Association's (FCBA) Engineering and Technical Practice Committee will hold a brown bag lunch titled "Roundtable discussion with FCC and NTIA Technical Offices". The speakers will be Edward Davison (Deputy Chief of the NTIA's Office of Spectrum Management), Julius Knapp (Chief of the FCC's Office of Engineering and Technology), Karl Nebbia (Chief of the NTIA's OSM), and Ronald Repasi (Deputy Chief of the FCC's OET). For more information, contact Christy Hammond at 202-719-7365 or chammond at wileyrein dot com. Location: Wiley Rein, 10th floor, 1750 K St., NW.

1:00 - 2:30 PM. The Center for American Progress (CAP) will host a panel discussion titled "Opening Doors: Finding the Keys to Open Government". The speakers will be Ari Schwartz (Center for Democracy and Technology), Patrice McDermott, Dan Chenok, Katherine McFate, and Beth Noveck (New York law school). See, notice. Location: CAP, 10th floor, 1333 H St., NW.

Deadline to submit initial comments to the Federal Communications Commission (FCC) regarding competitive bidding procedures for Auction 79. This is proceeding is AU Docket No. 09-21 (122 FM broadcast construction permits). See, February 27, 2009, Public Notice (DA 09-422), and notice in the Federal Register, March 11, 2009, Vol. 74, No. 46, at Pages 10578-10581.

Monday, March 23

9:30 - 11:00 AM. The American Enterprise Institute (AEI) will host a panel discussion titled "Do or Die for the Doha Trade Talks". The speakers will be Claude Barfield (AEI), Aaditya Mattoo (World Bank), Christopher Padilla (C&M International), Robert Vastine (Coalition of Service Industries), and Philip Levy (AEI). See, notice. Location: AEI, 1150 17th St., NW.

9:30 AM - 1:30 PM. The New America Foundation (NAF) and the CTIA will host an event titled "The Wireless Future of Health IT". The speakers may include Craig Barrett (Intel), Thomas Kalil (Associate Director for Policy, White House Officer for Science and Technology Policy), Vince Kuraitis (Better Health Technologies), Max Stachura (Medical College of Georgia), Paul Meyer (Voxiva, Inc.), Douglas McClure (Center for Connected Health Care), Carolyn Brandon (CTIA), Julie Barnes (NAF), and Michael Calabrese (NAF). Lunch will be served. See, NAF notice. Location: Room G-106 Dirksen Building, Capitol Hill.

10:00 AM. The National Telecommunications and Information Administration (NTIA) and the Rural Utilities Service (RUS) will hold the third in a series of four meetings regarding the broadband grant programs created by HR 1 [LOC | WW], the huge spending bill enacted in February, which programs are also known as the Broadband Technology Opportunities Program (BTOP). See, notice in the Federal Register, March 12, 2009, Vol. 74, No. 47, at Pages 10716-10721. Location: Department of Commerce, 1401 Constitution Ave., NW.

12:00 NOON. The Cato Institute will host an event titled "Tax Havens Should be Celebrated, Not Persecuted". The speakers will be Daniel Mitchell, author of book [Amazon] titled "Global Tax Revolution: The Rise of Tax Competition and the Battle to Defend It", and Richard Rahn, a former member of the Cayman Islands Monetary Authority. See, notice. Location: Room B-340, Rayburn Building, Capitol Hill.

Tuesday, March 24

9:30 AM. The U.S. Court of Appeals (DCCir) will hear oral argument in Morris Communications, Inc v. FCC, App. Ct. No. 08-1080. Judges Ginsburg, Henderson and Kavanaugh will preside. See, FCC's brief [158 pages in PDF] states that the issue is whether the FCC "reasonably denied Morris's request to waive the agency's installment payment rules and reinstate Morris's radio licenses after those licenses canceled automatically upon Morris's failure to make full and timely installment payments ..." Location: 333 Constitution Ave., NW.

9:30 - 11:00 AM. The American Enterprise Institute (AEI) will host a panel discussion titled "Trade Versus Security". The speakers will be Christine McDaniel (USITC), Stewart Baker (Center for Strategic and International Studies), David Hummels (Purdue University), and Philip Levy (AEI). See, notice. Location: AEI, 1150 17th St., NW.

10:00 AM. The National Telecommunications and Information Administration (NTIA) and the Rural Utilities Service (RUS) will hold the fourth in a series of four meetings regarding the broadband grant programs created by HR 1 [LOC | WW], the huge spending bill enacted in February, which programs are also known as the Broadband Technology Opportunities Program (BTOP). See, notice in the Federal Register, March 12, 2009, Vol. 74, No. 47, at Pages 10716-10721. Location: Department of Commerce, 1401 Constitution Ave., NW.

TIME? The U.S.-China Economic and Security Review Commission will hold a meeting titled "China’s Industrial Policy and its Impact on U.S. Companies, Workers and the American Economy". Location: Room 236, Russell Building, Capitol Hill.

Deadline to submit reply comments to the Federal Communications Commission's (FCC) Media Bureau in response to the petitions for declaratory rulings of the Alliance for Community Media (ACM) and others regarding carriage of public, educational and governmental (PEG) channels. See, order [PDF] setting deadlines.

Wednesday, March 25

9:00 AM - 5:00 PM. The National Institute of Standards and Technology's (NIST) Office of Law Enforcement Standards' (OLES) will hold a meeting to bring Project 25 Compliance Assessment Program stakeholders together to discuss what the process will be to assess software based test tools for the Project 25 Compliance Assessment Program. See, notice in the Federal Register, February 17, 2009, Vol. 74, No. 30, at Pages 7397-7398. This meeting will occur via teleconference and at the National Telecommunications and Information Administration's (NTIA) Institute for Telecommunication Sciences (ITS) in Boulder, Colorado.

9:30 AM. The Senate Judiciary Committee (SJC) will hold a hearing titled "Oversight of the Federal Bureau of Investigation". The witness will be FBI Director Robert Mueller. See, notice. The SJC will webcast this event. Location: Room 216, Hart Building.

Deadline to submit comments to the Federal Communications Commission (FCC) regarding the development of a rural broadband strategy, as required by the 2008 farm bill. This proceeding is GN Docket No. 09-29. See, FCC public notice, DA 09-561.

Thursday, March 26

6:00 - 8:15 PM. The Federal Communications Bar Association's (FCBA) Wireline Practice Committee will host an event titled "CLE Seminar on Dial N for Numbering: Understanding the Role of Numbers and Numbering Policy in Modern Communications". See, notice and agenda. Location: Sidley Austin, 1501 K St., NW.

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