Business is moving at the speed of the internet, and competition does not sleep. Ice Miller’s Internet, Technology, and Social Media blog is intended to help businesses address the pressures and challenges posed by today’s internet age.
Archive for November, 2009
The Wall Street journal recently reported that employees sometimes have more privacy rights than they might expect when it comes to the corporate email server. Legal experts say that courts in some instances are showing more consideration for employees who feel their employer has violated their privacy electronically.
ScrippsNews has reported that social media has become the newest holiday strategy for some retailers, who are hoping the technology can bring some luster to their efforts to reach customers who are holding tight to their money this year.
Full Story Here: http://www.scrippsnews.com/node/49343
The long-awaited Guides Concerning the Use of Endorsements and Testimonials in Advertising (the Guides) adopted by the Federal Trade Commission (FTC) become effective December 1, 2009. Although the Guides previously addressed endorsements by consumers, experts, organizations and celebrities, as well as disclosure of “material connections” between an endorser and an advertiser, they have now been revised, for the first time in 30 years, to reflect today’s era of Web 2.0 advertising: social networking sites, blogs and Internet advertising.
In an age when consumers are more influenced than ever by referrals and ratings, the Guides are intended to create more transparency to the reader and more accountability to the advertiser for the new generation of “word of mouth advertising” which is growing rapidly and is too often hidden by anonymity or shrouded in potential bias. In adopting these revised Guides, the FTC shunned the critics that hailed industry self-regulation as sufficient, removed safe harbors such as “results not typical” style disclaimers, and placed the burden of responsibility for truthful advertising squarely on the advertiser, even in situations where the advertiser might appear to have little control over the actual marketer.
There is no denying that America’s workforce is engrossed in the world of Web-based social networking. Web sites such as Facebook and LinkedIn are now an integral part of daily life- both professionally and personally. The Pew Internet & American Life Project reports that 35 percent of online adults use social networking sites. The number is nearly twice that amount for online teens. LinkedIn’s Web site claims to have over 38 million members in over 200 countries and territories around the world. Employees have harnessed the power of social networking to quickly and easily develop often large professional networks and, as a result, your company’s once closely-guarded customer list may have gone public.
Social networking sites provide your employees an opportunity to develop a professional network simply by publicly connecting with contacts, including your customers. Sites, such as LinkedIn, permit users to form a network of “connections” to develop a web of professionals that can be highly effective for sales and marketing purposes. Despite the undeniable advantages that social networking can provide in the business world, these sites also pose a potential risk to your trade secrets, as well as a way by which your employees may try to avoid their contractual non-solicitation obligations. There are steps you should take now to protect your confidential and proprietary information and to exert a level of control over your employees’ social networking activities.
The very thing that makes social networking so beneficial – the social aspect – also does the damage. Trade secrets derive their value, and are legally protected against misappropriation, because of the fact that they are secret. A company’s customer list may qualify as a trade secret, so long as the company seeking to assert a claim for misappropriation can establish (among other requirements) that it took reasonable steps to protect the secrecy of that information. This is where social networking in the workplace can become a problem.
With LinkedIn, for example, an employee may use confidential customer contact information to send a “LinkedIn” invitation to your customers. If the customer accepts, the employee and your customer are now electronically and publicly “connected,” and your customer will appear on a list of the employee’s contacts (unless the employee elects to “hide” his or her contacts). An arguable result is that those customer contacts may lose their confidential nature and you may lose your ability to argue that the customer information is a trade secret. Another possibility is that your competitors will obtain a “customer roadmap” simply by viewing your employee’s “connection” list.
Also, what happens to those “connections” when your employee is fired or quits? Who owns the connection? Should (and can) you require your employees to “unlink” with your customers at the termination of the employment relationship? What if the employee has contractual non-solicitation obligations? These questions underscore how an employee’s use of a social networking site can lead to problems for you.
So what’s the solution? Well, the solution likely differs depending on where you come out on a risk-benefit analysis of social networking sites. Some employers have imposed a full-scale ban on the use of social networking sites in the workplace. However, as one commentator put it, such a ban may drive your employees to find underground ways to use social networking sites. This solution may also seem impractical when there are so many advantages to using these sites. A better option may be for you to implement realistic policies (and, optimally, contracts) concerning and controlling your employees’ use of social networking sites, in addition to other Web 2.0 outlets (such as blogs, wikis, pod-casts, and the like). Policies and contract provisions should define confidential information and/or trade secrets, and make employees aware of the threats social networking sites pose to the company’s information. They should clearly explain the importance of maintaining the confidentiality of your company’s information and any disciplinary action (and/or potential lawsuit) that would or could result from an employee’s disclosure of trade secrets. They should prohibit certain activities that could put trade secret information in jeopardy, and require certain steps to be taken upon the termination of the employment relationship. For example, with non-solicitation provisions, you could require your employee to disclose his or her social networking contacts, “unlink” from your customers, and prohibit the employee, for a period of time, from “connecting” to your clients for a competitive purpose.
With the explosive growth of social networking sites, now is the time to consider the potential pitfalls associated with employees’ use of social networking sites. You need to take control of your employees’ use of social networking sites and address the potential impact these sites may have on your business. We recommend that you work with legal counsel to ensure that your employment polices and agreements address the risks posed by social networking sites.
A few weeks after comforting the family of U.S. Holocaust Memorial Museum security guard Stephen T. Johns as he lay dying at George Washington University Hospital, Rabbi Tamara Miller — the hospital’s head of spiritual care — wrote about the experience. The essay was published in June on washingtonpost.com’s On Faith blog. Five weeks later, the hospital fired her.
The testimony of Doug Brent, Chief Operating Officer of the Internet Corporation for Assigned Names and Numbers (ICANN), before a committee of the United States House of Representatives on September 23, 2009, has raised concerns among trademark owners. In his testimony, Mr. Brent alluded to the possibility that a significant number of new generic top-level domains (gTLDs) could be authorized for the Internet domain name system.
ICANN is the organization responsible for the controlling the top-level domains available for Internet users. Among its duties, ICANN authorizes the gTLDs that are so necessary for navigating the World Wide Web. By the late 1980s, the original set of gTLDs was established and in use. These gTLDs included the ubiquitous .com, its widely used brethren .net and .org, as well as .edu, .mil, .gov, and .int. In 2000, ICANN announced the authorization of seven new gTLDs: .aero, .biz, .coop, .info, .museum, .name, and .pro. In 2005, ICANN rolled out more gTLDs: .cat, .jobs, .mobi, .tel, and .travel. ICANN also has authorized numerous country code top-level domain names (ccTLDs), such as .us, uk, and .ca.
Mr. Brent’s testimony before Congress included a preview of a significant expansion of the gTLDs that could become available for use in the foreseeable future. Perhaps the most remarkable change to the domain name system would be gTLDs that themselves are trademarks. According to Mr. Brent, a company such as IBM could apply for and receive a gTLD representing the company’s brand, e.g., a “.IBM” gTLD. The application fee for such a gTLD is not cheap, so the demand for such company-specific or organization-specific gTLDs may not be that significant. Nevertheless, that ICANN would make such an option available is an interesting development.
While the prospect of trademark-specific gTLDs is noteworthy, a far larger concern to trademark owners would be the introduction of more unrestricted gTLDs. In a typical domain name, such as www.icemiller.com, the “.com” portion is the top-level domain. The “icemiller” portion is the second level domain. Currently, anyone can register any available domain name that has a .com, .net, .org., .info, or .biz extension. A second level domain can be any unique string of alphanumeric characters.
This provides individuals and businesses a great deal of flexibility for acquiring second level domains, but also raises issues for trademark and domain name owners. First, it is not unusual for a domain name owner to register not only the .com version of the domain name, but also the .net, .org., .info, and .biz versions. These defensive registrations cost money, but remove the domain names from the market. The addition of new unrestricted gTLDs likely will require additional expense for defensive domain name registrations. Second, because domain names are inexpensive and easy to acquire, the business of speculating in domain names continues to be active.
I suspect many trademark owners have had the experience of undertaking the process of clearing a new trademark, only to discover that second-level domain for that trademark under the “.com”, “.net”, and “.biz” top-level domains already are owned by someone else, but not used by that party for any active Web site. Domain names are transferable, but domain name speculators often expect a significant return on their investment before they will transfer a second-level domain name. If the domain name was originally owned by another party before the trademark rights are established, the trademark owner is faced with the choice of paying the price for the domain name, choosing a different trademark, or choosing an alternate second-level domain name that may not correlate so directly with the trademark.
A different problem exists where the second-level domain that was acquired after trademark rights were established. If a second-level domain name is acquired in bad faith, the trademark owner has remedies available under ICAAN’s Uniform Domain Name Dispute Resolution Policy (UDRP), and under the United States Anti-Cybersquatting Consumer Protection Act. Both the UDRP and Anti-Cybersquatting Consumer Protection Act have been around for about a decade. The UDRP is an administrative proceeding that is available in the United States and internationally. The remedy available under the UDRP is a transfer or cancellation of the infringing domain name.
The Anti-Cybersquatting Consumer Protection Act provides access to federal courts for resolution of domain name disputes that involve trademarks, and also enables trademark holders to bring lawsuits in rem (against the domain name), instead of against the registrant of the domain name if the registrant cannot be found. In addition to transfer or cancellation of the infringing domain name, a trademark owner that is successful in a suit under the Anti-Cybersquatting Consumer Protection Act also may recover damages and attorneys fees. While the introduction of new unrestricted gTLDs will provide opportunities for a multitude of new domain names, trademark owners have cause for concern.
Over the years, trademark owners have spent significant sums acquiring domain names from domain name speculators, significant sums acquiring second-level domain names for purely defensive purposes, and significant sums pursuing cybersquatters through UDRP and Anti-Cybersquatting Consumer Protection Act actions. The first quarter of 2010 is the date most commonly quoted for the launch of the next wave of gTLDs. Trademark owners would be well-served by monitoring the activities of ICANN between now and then, and developing strategies to deal with new gTLDs as they are released.