After last week’s guest post on website due diligence with the Domaining Diva, we bring you a guest post by Zak Muscovitch, also known as the DN Attorney, on trademark and copyright.
Buying a website or online business can be an exciting time. It would be terrible if you spent a lot of money and time on purchasing a website only to find out that the domain name associated with the website was the target of a trademark infringement or cybersquatting claim, thereby possibly resulting in you losing the domain name.
Trademarks and domains
The first step in avoiding such a predicament would be to conduct a search of both registered and unregistered trademarks. Trademarks can be “words” or “logos”. Trademarks are generally registered in specific jurisdictions and only valid where so registered, so one may want to check out several national trademark registries, such as the USPTO, the CIPO, IP Australia and the UK Intellectual Property Office, for example.
It is not always simple to determine if a registered trademark is problematic for a buyer because it is identical or similar to the domain name associated with the website being purchased. For example, a registered trademark for ABC, in connection with clothing, may not be a problem if you are buying ABC.COM for a website dealing with electronics.
Of course there are plenty of exceptions to the general rules, such as in the case of famous trademarks. For example, COCACOLA.COM could probably not be used by anyone except the famous Coca-Cola Company, for anything even if its is not related to soft drinks, because their trademark is so well known that people would naturally assume that the domain name is related to the famous soft drink manufacturer. Accordingly, often a buyer should run the proposed domain name by a qualified domain name or trademark lawyer, prior to expending a significant amount of money on a website and associated domain name.
Registered trademarks are not the only kind of trademark to be aware of however. There are also “unregistered trademarks”, often referred to as “common law” trademarks. These are trademarks that have been used by a person or company without being formally registered, but are still distinctive enough and have been used long and wide enough, to qualify as a trademark for the purposes of stopping someone else from using an identical or similar mark in certain circumstances. They are however, more difficult to prove than a registered trademark. Accordingly, a simple Google search can often reveal third-party use of an unregistered trademark.
It is important to bear in mind that when it comes to trademark infringement, it does not usually matter whether a seller “intended to infringe” or was merely “unaware” of the existing registered or common law trademark rights. Likewise, for a buyer, it likely won’t be a defense to a trademark infringement claim, if you were not aware of the third-party’s trademark rights when you acquired and began using the domain name and/or trademarked logo. Accordingly, caution must be exercised depending on the value and importance of the transaction.
A buyer may also decide to check court and arbitration databases in order to determine whether a trademark owner has previously commenced legal proceedings regarding a particular trademark or something similar. This would give the buyer an idea of whether the domain name and/or logo are already the subject of legal proceedings, or alternatively, the degree of vigilance a trademark owner has shown in protecting their mark in the past. For example, one can check the PACER court database in the United States, the National Arbitration Forum’s Domain Name Dispute Database, and the World Intellectual Property Organization’s Domain Name Dispute Database.
Copyright: Ensuring Content and Software is Legally Owned
Copyright law generally protects the ownership of original content, such as a photograph, text, or song, whereas trademark rights protect brands. When considering buying a website that has content, such as images and text, it is important to ensure that the seller actually owns the content and thereby has the right to sell it to you.
Determining whether a seller validly owns content can often be difficult. Generally, the author of the particular text (the writer) or image (the photographer of graphic designer) is the party that holds the “copyright” over that particular content. Accordingly, the seller of a website with content should explain and certify that the seller created the content, or alternatively, has a valid license to use the content. A license to use the content could come from having paid for a license to use a stock photo, for example. Stock photo companies regularly troll the Internet looking for unlicensed use of their copyrighted images and then send out invoices or commence proceedings. Accordingly, care should be taken to ensure that all content was created by the seller or properly licensed by the seller and that the seller can properly transfer the license to the buyer. Additionally, if a seller used employees or contractors to help built out a website, those employees and/or contractors should have assigned all of their rights to the seller so that the seller becomes the sole and exclusive copyright holder in all respects.
A similar issue arises in the case of software. If any software is used in a website, then a buyer may want to confirm that the software is owned and can be sold by the seller to the buyer, or alternatively, that a valid license is held by the seller which can be validly transferred to the buyer. Otherwise, copyright infringement may occur and the buyer can be held responsible once they take over the website.
I, of course, have to remind you that there is no substitute for seeking the counsel of an experienced website attorney, and accordingly the information provided here is for general education purposes only, and should not be relied upon by you for any business purpose.
Zak Muscovitch is respected and well-known domain name lawyer who has represented domain name and website owners since 1999. He has assisted buyers and sellers in website transactions worth millions of dollars, and has set numerous precedents in domain name dispute law. He represents clients from all over the world. His website is http://www.DNattorney.com.
Have something to say about this post? More questions for the DN Attorney? Let us know in the comments!