e-Commerce Docket Sheet

Licensing Software withLimited Rights Does Not Constitute 'Limited Publication'

Licensing software with limited rights does not constitute 'limited publication' for purposes of determining whether a copyright notice was required to be included with the software code, where the software was licensed to a broad group of business entities. DaimlerChrysler Services v. Summit National, No. 02-71871, 2006 U.S. Dist. LEXIS 32049 (E.D. Mich. May 22, 2006). The court ruled that because the software was licensed in 1983 without a copyright notice, the software code was not protected by copyright. The court rejected the argument that the software had received only limited publication not requiring a copyright notice, noting that the software was licensed to banks, corporations and utilities and 'aggressively marketed and provided to anybody who would pay money for it.'

Video Game Makers Settle FTC Charges Concerning Hidden Adult Content

The distributors of the Grand Theft Auto: San Andreas video game have settled FTC charges that they failed to disclose to consumers that the game contained hidden content inconsistent with the rating that the Entertainment Software Rating Board assigned to the game. In re: Take-Two Interactive Software, Inc., No. 052 3158 (FTC June 8, 2006). The companies that developed and marketed the game, Take-Two Interactive Software Inc., and Rockstar Games Inc., entered into a consent agreement with the FTC in which they agreed to make clear and prominent disclosures on product packaging, and in advertisements and promotions concerning content relevant to the rating of electronic games, and not to misrepresent the rating or content descriptors for electronic games. The companies also agreed to establish, implement and maintain a comprehensive system reasonably designed to ensure that all content in an electronic game is considered and reviewed in preparing submissions to a rating authority. The FTC press release is available at www.ftc.gov/opa/2006/06/grandtheftauto.htm.

Credit Card Issuing BankNot a Beneficiary of Data Security Program

A credit-card issuing bank may not obtain reimbursement for losses in connection with a breach of network security data at a retail store on the theory that it is a third-party beneficiary of the information-security agreement between the retailer's payment processor and the credit-card system. Sovereign Bank v. BJ's Wholesale Club, Inc., No. 1:CV-05-1150 (M.D. Pa. June 16, 2006). The credit-card issuing bank brought suit against the retailer and the acquiring bank that processed the retailer's credit-card transactions, claiming that the security breach was caused by the retailer's failure to comply with the Cardholder Information Security Program (CISP) required by the acquiring bank's agreement with the credit-card company. In particular, the issuing bank claimed that the retailer's transaction-processing system retained and stored full magnetic-stripe data from credit cards after processing a transaction, in violation of the CISP. Having previously dismissed the claims against the retailer, the court dismissed the remaining claims against the acquiring bank on the ground that the issuing bank, which sought reimbursement for the unauthorized charges and the cost of issuing new credit cards, was not an intended third-party beneficiary of the agreement between the credit-card system and the acquiring bank.

Right to Use 'Disney' in Domain Name for Area Near Theme Park Not Established in UDRP

The respondent in a dispute over the 'finestdisneyhomes.com' domain failed to establish that his use of the domain was legitimate because the word 'Disney' is descriptive of the geographic area around the Disney trademark owner's Florida resort. Disney Enterprises, Inc. v. Kudrna, No. FA0604000686103 (NAF June 2, 2006). The panelist in the proceeding under the Uniform Domain Name Dispute Resolution Policy (UDRP) acknowledged that the UDRP should not be interpreted to limit references to descriptive or generic terms, but concluded that the respondent had failed to demonstrate that the word 'Disney' is descriptive of an area or destination. The panelist also concluded that the respondent had failed to establish that his use of the word did not cause confusion with the Disney mark, rejecting his argument that his use of the domain in connection with rental of single-family homes was a business activity distinct from that in which the trademark owner was engaged. The panelist concluded that the respondent had registered and used the domain name in bad faith 'primarily for the purpose of disrupting the business of a competitor' within the meaning of the UDRP.

Consumer Plaintiff Has No Standing To Enforce CAN-SPAM

An individual consumer plaintiff has no standing to file a private action under the federal CAN-SPAM Act. Madorsky v. Does, 2006 U.S. Dist. LEXIS 37631 (N.D. Ohio, June 8, 2006). The court dismissed the complaint in which the consumer-plaintiff alleged that numerous named and unidentified parties had sent 'millions' of unsolicited commercial e-mails to his computer. The court noted that both the act itself and its legislative history demonstrate that only the Federal Trade Commission and certain specified entities may bring an action under the act. The court also dismissed the plaintiff's claims under the Consumer Fraud and Abuse Act for failure to meet the statute's $5000 jurisdictional threshold.

Domain Name Arbitrator Finding on Bad Faith Has No Preclusive Effect

An arbitrator's finding that the respondent in a proceeding under the Uniform Domain Name Dispute Resolution Policy (UDRP) did not register disputed domain names in bad faith has no preclusive effect in a subsequent trademark-infringement suit brought in a U.S. court. Hewlett-Packard Development Co. v. Midwest Information Technology Group, Inc., 2006 U.S. Dist. LEXIS 36380 (C.D. Ill. June 2, 2006).

The court denied the defendant's motion for summary judgment, dismissing the complaint on grounds of res judicata and collateral estoppel, ruling that the arbitrator's decision did not satisfy the requirements for the application of either doctrine because it was not a 'binding decision' under the express terms of Section 4(k) of the UDRP. The court also noted that the UDRP arbitrator was not competent to hear all of the plaintiff's claims, because UDRP proceedings provide only limited remedies and are not intended to preclude separate actions to resolve claims based on theories of recovery other than a violation of the UDRP.

Industry-specific Focus of Products Using Similar Marks Not Likely to Confuse

The Trademark Trial and Appeals Board (TTAB) was correct in concluding that 'very similar' trademarks covering interactive CD-ROM goods were nevertheless not likely to create confusion, because the trademarks covered 'industry-specific' goods in industries that were 'distinct and separate.' M2 Software, Inc. v. M2 Communications, Inc., 2006 U.S. App. LEXIS 13936 (Fed. Cir. June 7, 2006).

The appeals court upheld the TTAB application of the 'DuPont' factors in evaluating the likelihood of confusion, including the Board's conclusion that the parties' goods were not related, because one party's trademark was limited to distribution in the fields of pharmacy and medicine, while the other party's trademark was limited to the fields of music and entertainment. The court rejected the argument that the parties' goods were nevertheless still related because they both shared the same media format.

Docket Sheet is written by Julian S. Millstein, Edward A. Pisacreta and Jeffrey D. Neuburger, partners in the New York office of Brown Raysman Millstein Felder & Steiner LLP (www.brownraysman.com).

Licensing Software withLimited Rights Does Not Constitute 'Limited Publication'

Licensing software with limited rights does not constitute 'limited publication' for purposes of determining whether a copyright notice was required to be included with the software code, where the software was licensed to a broad group of business entities. DaimlerChrysler Services v. Summit National, No. 02-71871, 2006 U.S. Dist. LEXIS 32049 (E.D. Mich. May 22, 2006). The court ruled that because the software was licensed in 1983 without a copyright notice, the software code was not protected by copyright. The court rejected the argument that the software had received only limited publication not requiring a copyright notice, noting that the software was licensed to banks, corporations and utilities and 'aggressively marketed and provided to anybody who would pay money for it.'

Video Game Makers Settle FTC Charges Concerning Hidden Adult Content

The distributors of the Grand Theft Auto: San Andreas video game have settled FTC charges that they failed to disclose to consumers that the game contained hidden content inconsistent with the rating that the Entertainment Software Rating Board assigned to the game. In re: Take-Two Interactive Software, Inc., No. 052 3158 (FTC June 8, 2006). The companies that developed and marketed the game, Take-Two Interactive Software Inc., and Rockstar Games Inc., entered into a consent agreement with the FTC in which they agreed to make clear and prominent disclosures on product packaging, and in advertisements and promotions concerning content relevant to the rating of electronic games, and not to misrepresent the rating or content descriptors for electronic games. The companies also agreed to establish, implement and maintain a comprehensive system reasonably designed to ensure that all content in an electronic game is considered and reviewed in preparing submissions to a rating authority. The FTC press release is available at www.ftc.gov/opa/2006/06/grandtheftauto.htm.

Credit Card Issuing BankNot a Beneficiary of Data Security Program

A credit-card issuing bank may not obtain reimbursement for losses in connection with a breach of network security data at a retail store on the theory that it is a third-party beneficiary of the information-security agreement between the retailer's payment processor and the credit-card system. Sovereign Bank v. BJ's Wholesale Club, Inc., No. 1:CV-05-1150 (M.D. Pa. June 16, 2006). The credit-card issuing bank brought suit against the retailer and the acquiring bank that processed the retailer's credit-card transactions, claiming that the security breach was caused by the retailer's failure to comply with the Cardholder Information Security Program (CISP) required by the acquiring bank's agreement with the credit-card company. In particular, the issuing bank claimed that the retailer's transaction-processing system retained and stored full magnetic-stripe data from credit cards after processing a transaction, in violation of the CISP. Having previously dismissed the claims against the retailer, the court dismissed the remaining claims against the acquiring bank on the ground that the issuing bank, which sought reimbursement for the unauthorized charges and the cost of issuing new credit cards, was not an intended third-party beneficiary of the agreement between the credit-card system and the acquiring bank.

Right to Use 'Disney' in Domain Name for Area Near Theme Park Not Established in UDRP

The respondent in a dispute over the 'finestdisneyhomes.com' domain failed to establish that his use of the domain was legitimate because the word 'Disney' is descriptive of the geographic area around the Disney trademark owner's Florida resort. Disney Enterprises, Inc. v. Kudrna, No. FA0604000686103 (NAF June 2, 2006). The panelist in the proceeding under the Uniform Domain Name Dispute Resolution Policy (UDRP) acknowledged that the UDRP should not be interpreted to limit references to descriptive or generic terms, but concluded that the respondent had failed to demonstrate that the word 'Disney' is descriptive of an area or destination. The panelist also concluded that the respondent had failed to establish that his use of the word did not cause confusion with the Disney mark, rejecting his argument that his use of the domain in connection with rental of single-family homes was a business activity distinct from that in which the trademark owner was engaged. The panelist concluded that the respondent had registered and used the domain name in bad faith 'primarily for the purpose of disrupting the business of a competitor' within the meaning of the UDRP.

Consumer Plaintiff Has No Standing To Enforce CAN-SPAM

An individual consumer plaintiff has no standing to file a private action under the federal CAN-SPAM Act. Madorsky v. Does, 2006 U.S. Dist. LEXIS 37631 (N.D. Ohio, June 8, 2006). The court dismissed the complaint in which the consumer-plaintiff alleged that numerous named and unidentified parties had sent 'millions' of unsolicited commercial e-mails to his computer. The court noted that both the act itself and its legislative history demonstrate that only the Federal Trade Commission and certain specified entities may bring an action under the act. The court also dismissed the plaintiff's claims under the Consumer Fraud and Abuse Act for failure to meet the statute's $5000 jurisdictional threshold.

Domain Name Arbitrator Finding on Bad Faith Has No Preclusive Effect

An arbitrator's finding that the respondent in a proceeding under the Uniform Domain Name Dispute Resolution Policy (UDRP) did not register disputed domain names in bad faith has no preclusive effect in a subsequent trademark-infringement suit brought in a U.S. court. Hewlett-Packard Development Co. v. Midwest Information Technology Group, Inc., 2006 U.S. Dist. LEXIS 36380 (C.D. Ill. June 2, 2006).

The court denied the defendant's motion for summary judgment, dismissing the complaint on grounds of res judicata and collateral estoppel, ruling that the arbitrator's decision did not satisfy the requirements for the application of either doctrine because it was not a 'binding decision' under the express terms of Section 4(k) of the UDRP. The court also noted that the UDRP arbitrator was not competent to hear all of the plaintiff's claims, because UDRP proceedings provide only limited remedies and are not intended to preclude separate actions to resolve claims based on theories of recovery other than a violation of the UDRP.

Industry-specific Focus of Products Using Similar Marks Not Likely to Confuse

The Trademark Trial and Appeals Board (TTAB) was correct in concluding that 'very similar' trademarks covering interactive CD-ROM goods were nevertheless not likely to create confusion, because the trademarks covered 'industry-specific' goods in industries that were 'distinct and separate.' M2 Software, Inc. v. M2 Communications, Inc., 2006 U.S. App. LEXIS 13936 (Fed. Cir. June 7, 2006).

The appeals court upheld the TTAB application of the 'DuPont' factors in evaluating the likelihood of confusion, including the Board's conclusion that the parties' goods were not related, because one party's trademark was limited to distribution in the fields of pharmacy and medicine, while the other party's trademark was limited to the fields of music and entertainment. The court rejected the argument that the parties' goods were nevertheless still related because they both shared the same media format.

Docket Sheet is written by Julian S. Millstein, Edward A. Pisacreta and Jeffrey D. Neuburger, partners in the New York office of Brown Raysman Millstein Felder & Steiner LLP (www.brownraysman.com).