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 Chilling Effects Clearinghouse > Trademark > Notices > There are some things money can't buy... (NoticeID 17, http://chillingeffects.org/N/17) Printer-friendly version

There are some things money can't buy...

April 09, 2001

 

Sender Information:
MasterCard International
Sent by: [Private]
Baker & Botts
30 ROCKEFELLER PL
44th Floor
New York, NY, 10112

Recipient Information:
Mr. Brad Templeton
NETFUNNY.COM
Sunnyvale, CA


Sent via: VIA E-MAIL AND FE
Re: MasterCard/Infringement by NETFUNNY.COM web site

Dear Mr. Templeton:

We are the attorneys for MasterCard International ("MasterCard").

Since at least as early 1998, MasterCard has aired a series of television and print advertisements that feature the names and/or images of a series of goods or services purchased by one or more individuals and which, with either voice-overs and/or other visual displays, convey to the viewer the price of each of these items (the "MasterCard Priceless Advertisements"). At the end of each of the MasterCard Priceless Advertisements a phrase identifying some priceless intangible that cannot be purchased (such as "a day where all you have to do is breathe") is followed by the word and/or voice over: "priceless". Immediately following "priceless" are the words and/or voice overs: "there are some things money can't buy, for everything else there's MasterCard".

Additionally, MasterCard is the owner of U.S. service mark registrations for the marks "PRICELESS" (Reg. No. 2,370,508); "THERE ARE SOME THINGS MONEY CAN'T BUY, FOR EVERYTHING ELSE THERE'S MASTERCARD" (Reg. No. 2,259,941); and "THERE ARE SOME THINGS MONEY CAN'T BUY. FOR EVERYTHING ELSE THERE'S MASTERCARD." (Reg. No. 2,297,299) (collectively, the "Priceless Marks"). Indeed, MasterCard has applied for protection of all of these marks in numerous countries throughout the world. As a result of MasterCard's extensive advertising, the Priceless Marks have become associated exclusively with MasterCard's financial services products. Furthermore, MasterCard owns multiple U.S. copyright registrations for the Priceless Advertisements.

MasterCard is also the owner of multiple federal registrations for MASTERCARD (unstylized) (the "MASTERCARD Mark"). The MASTERCARD Mark has long been featured in MasterCard advertising, including the MasterCard Priceless Advertisements. As a result of its long and continued use, the MASTERCARD Mark has become widely recognized as identifying MasterCard's financial services products.

It has come to our attention that you are distributing at the URL ww.netfunny.com/rhf/jokes/Apr/columbine.html material that infringes the MasterCard Priceless Advertisements and that further infringes MasterCard's MASTERCARD Mark and Priceless Marks. This material (the "Infringing Material") blatantly copies the sequential display of a series of items belonging to one or more individuals, showing, the "price" of each item, and, at the end, infringes, with impunity, the MASTERCARD Mark and the Priceless Marks.

Specifically, the Infringing Material is entitled PRICELESS, followed by a series of text, "200 rounds of ammo: $70; Two ski masks: $24; Two black trench coats: $260; the look on your classmates faces right before you blow their heads off -- priceless" and concludes with the MasterCard's slogan, for which it owns a U.S. trademark registration: "There are some things money can't buy, for everything else there's MasterCard."

Please be advised that in publishing the Infringing Material, you have infringed MasterCard's rights under the federal and state trademark and unfair competition laws, under the federal and state anti-dilution laws, and under the Copyright Act. The fact that your actions take place in the context of the sad events at Columbine merely exacerbates the problem from our client's viewpoint. The Infringing Material denigrates the tragedy at Columbine High School and holds our client out as sponsoring this highly distasteful material by using the format of the MasterCard Priceless Advertisements and prominently displaying MasterCard's famous trademarks.

Accordingly, we demand that you confirm immediately and no later than Friday, April 13, 2001, that you will remove the Infringing Material from the web site www.netfunny.com and that there will be no further publication of the Infringing Material or any other material which infringes MasterCard's rights as set forth above.

This letter does not constitute an exhaustive statement of MasterCard's legal position nor is it a waiver of any of their rights and/or remedies in this or any other matter.

Very truly yours,

[Attorney]

bcc:[Other Attorneys]
April 9, 2001

 
FAQ: Questions and Answers

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Question: What rights are protected by copyright law?

Answer: The purpose of copyright law is to encourage creative work by granting a temporary monopoly in an author's original creations. This monopoly takes the form of six rights in areas where the author retains exclusive control. These rights are:

(1) the right of reproduction (i.e., copying),
(2) the right to create derivative works,
(3) the right to distribution,
(4) the right to performance,
(5) the right to display, and
(6) the digital transmission performance right.

The law of copyright protects the first two rights in both private and public contexts, whereas an author can only restrict the last four rights in the public sphere. Claims of infringement must show that the defendant exercised one of these rights. For example, if I create unauthorized videotape copies of Star Trek II: The Wrath of Khan and distribute them to strangers on the street, then I have infringed both the copyright holder's rights of reproduction and distribution. If I merely re-enact The Wrath of Khan for my family in my home, then I have not infringed on the copyright. Names, ideas and facts are not protected by copyright.

Trademark law, in contrast, is designed to protect consumers from confusion as to the source of goods (as well as to protect the trademark owner's market). To this end, the law gives the owner of a registered trademark the right to use the mark in commerce without confusion. If someone introduces a trademark into the market that is likely to cause confusion, then the newer mark infringes on the older one. The laws of trademark infringement and dilution protect against this likelihood of confusion. Trademark protects names, images and short phrases.

Infringement protects against confusion about the origin of goods. The plaintiff in an infringement suit must show that defendant's use of the mark is likely to cause such a confusion. For instance, if I were an unscrupulous manufacturer, I might attempt to capitalize on the fame of Star Trek by creating a line of 'Spock Activewear.' If consumers could reasonably believe that my activewear was produced or endorsed by the owners of the Spock trademark, then I would be liable for infringement.

The law of trademark dilution protects against confusion concerning the character of a registered trademark. Suppose I created a semi-automatic assault rifle and marketed it as 'The Lt. Uhura 5000.' Even if consumers could not reasonably believe that the Star Trek trademark holders produced this firearm, the trademark holders could claim that my use of their mark harmed the family-oriented character of their mark. I would be liable for dilution.


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Question: What can be protected as a trademark?

Answer: You can protect

  • names (such as company names, product names)
  • domain names if they label a product or service
  • images
  • symbols
  • logos
  • slogans or phrases
  • colors
  • product design
  • product packaging (known as trade dress)


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Question: What exactly are the rights a trademark owner has?

Answer: In the US, trademark rights come from actual use of the mark to label one's services or products or they come from filing an application with the Patent and Trademark Office (PTO) that states an intention to use the mark in future commerce. In most foreign countries, trademarks are valid only upon registration.

There are two trademark rights: the right to use (or authorize use) and the right to register.

The person who establishes priority rights in a mark gains the exclusive right to use it to label or identify their goods or services, and to authorize others to do so. According to the Lanham Act, determining who has priority rights in a mark involves establishing who was the first to use it to identify his/her goods.

The PTO determines who has the right to register the mark. Someone who registers a trademark with the intent to use it gains "constructive use" when he/she begins using it, which entitles him/her to nationwide priority in the mark. However, if two users claim ownership of the same mark (or similar marks) at the same time, and neither has registered it, a court must decide who has the right to the mark. The court can issue an injunction (a ruling that requires other people to stop using the mark) or award damages if people other than the owner use the trademark (infringement).

Trademark owners do not acquire the exclusive ownership of words. They only obtain the right to use the mark in commerce and to prevent competitors in the same line of goods or services from using a confusingly similar mark. The same word can therefore be trademarked by different producers to label different kinds of goods. Examples are Delta Airlines and Delta Faucets.

Owners of famous marks have broader rights to use their marks than do owners of less-well-known marks. They can prevent uses of their marks by others on goods that do not even compete with the famous product.


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Question: What is the difference between a trademark and a service mark?

Answer: Trademarks refer to goods and products, that is, physical commodities which may be natural or manufactured or produced, and which are sold or otherwise transported or distributed.

Service marks refer to intangible activities which are performed by one person for the benefit of a person or persons other than himself, either for pay or otherwise.

Because the legal rights are essentially the same, the term "trademark" is frequently used to refer to both types of marks.

To learn about other types of marks, see Chapter 100 of the USPTO's Trademark Manual of Examining Procedure.

To tell whether something is a good or a service, see 37 C.F.R. ?6.1.


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Question: Can the owner of a foreign trademark make any claim against me?

Answer: Trademark rights are limited to the territory of the government that grants them. The owner of a French trademark, for example, cannot block someone else from using the same term in New York. However many courts around the world have held that they have authority to block Internet material because it "invades" their territory.

Can a foreign court order be enforced against you? Maybe. If you have assets in that country, they could be seized. If you visit that location, you could be arrested. If your website host has assets in the foreign jurisdiction, however, the host might delete your material to avoid liability. Domain names registered in certain TLDs (such as .com, .org and .net) can be lost to foreign mark owners under the UDRP, the special ICANN-imposed dispute procedure which protects every trademark owner in every country.

If the French trademark owner also has a US mark, then it can sue you in US courts, but only under the US mark rights and only for the kind of activity that would be an infringement under US trademark laws. US law protects free speech rights much more strongly than most foreign nations.

The truth is that anyone can make a claim even if a court would immediately reject it. The mere threat of a claim is often enough to cause the person receiving the threat to give up when s/he doesn't understand his rights.


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Question: Where can I find federal trademark registrations?

Answer: The United States Patent & Trademark Office (USPTO) keeps the US federal registry of trademarks. It has an online search capability, TESS, which contains more than 3 million pending, registered and dead federal trademarks. This database may not be complete. One should check the News page to see how current the information actually is.

Be aware: not all trademarks are contained in the US federal register. There are state trademarks, unregistered (common law marks) and foreign marks as well. A mark does not have to be registered to be valid.


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Question: What is copyright infringement? Are there any defenses?

Answer: Infringement occurs whenever someone who is not the copyright holder (or a licensee of the copyright holder) exercises one of the exclusive rights listed above.

The most common defense to an infringement claim is "fair use," a doctrine that allows people to use copyrighted material without permission in certain situations, such as quotations in a book review. To evaluate fair use of copyrighted material, the courts consider four factors:


  1. the purpose and character of the use
  2. the nature of the copyrighted work
  3. the amount and substantiality of copying, and
  4. the market effect.

(17 U.S.C. 107)

The most significant factor in this analysis is the fourth, effect on the market. If a copier's use supplants demand for the original work, then it will be very difficult for him or her to claim fair use. On the other hand, if the use does not compete with the original, for example because it is a parody, criticism, or news report, it is more likely to be permitted as "fair use."

Trademarks are generally subject to fair use in two situations: First, advertisers and other speakers are allowed to use a competitor's trademark when referring to that competitor's product ("nominative use"). Second, the law protects "fair comment," for instance, in parody.


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Question: What is an "innocent fan fiction?"

Answer:


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Question: How can I find out if someone has a valid trademark?

Answer: It isn't easy. In the United States, a trademark owner isn't required to register the mark anywhere, so there is no single central list of them all. Unlike most other nations, registration here is optional.

Many owners do register their marks with the government, however, to better notify the world of their claims. Each state has its own trademark registry for goods and services sold locally. For companies that sell in more than one state, there is a US federal registry that is accessible online through TESS. TESS is searchable by key word as well as by registration number.

Because registration is not required, however, a word might still be a protected mark even if it doesn't appear in any of these locations.

When a company is selecting a new brand, its trademark attorney will usually conduct a "trademark availability" search which will look in many different locations to try and ferret out competing uses of the desired name. Business directories, Internet search engines, telephone directories are other searched sources. Multi-national vendors will search trademark registries in foreign nations as well.

Even the most exhaustive search will not be conclusive, however, but it will usually indicate that if there is any other commercial use, it is probably limited to a very local area. It is OK to use the same mark as another company, so long as the new use isn't likely to confuse consumers.


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Question: Where can I find federal trademark law?

Answer: To be protected by federal trademark law, the marked goods and services must be used in interstate commerce. Federal trademark law is known as the Lanham Act. It protects marks that are registered with the United States Patent & Trademark Office as well as those that are in use but never registered.

Court opinions and United States Patent & Trademark Office (USPTO) regulations also interpret trademark rights and remedies. See the links to court sites provided by the Legal Information Insitute.


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Question: Where can I find state trademark law?

Answer: Each state has its own laws governing use of trademarks within its borders. To locate the trademark laws of the 50 states, use the Legal Information Institute links. Both legislation and court opinions create trademark rights and remedies.

If marks are used in interstate commerce, then federal law will also apply.


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Question: What is unfair competition?

Answer: "Unfair competition" covers a wide range of kinds of unjust business behavior---so many kinds, in fact, that it is impossible to give one simple general definition. In essence, unfair competition means trademark infringement or false advertising to confuse the public. In most states, only commercial competitors can be engaged in "unfair competition."


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Question: What is trademark dilution?

Answer: A type of infringement of a famous trademark in which the defendant's use, while not causing a likelihood of confusion, tarnishes the image or blurs the distintiveness of the plaintiff's mark. For example, if someone tries to sell "KODAK" pianos, KODAK could stop the person--even if consumers were not confused--because "KODAK" is a famous mark, and its use on products other than film and film-printing accessories (or other products on which Eastman Kodak places the mark) dilutes its uniqueness.

Many states have anti-dilution laws. The federal government only recently enacted anti-dilution legislation; see the Federal Trademark Dilution Act at 15 USC 1125(c).


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Question: Where can I find the text of the U.S. Copyright Act?

Answer: The federal Copyright Act may be found at http://www.loc.gov/copyright/title17/.


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Question: What is false designation of origin?

Answer: It covers similar ground to trademark infringement, but is more specific to misrepresentation of source, and applies even when there is no trademark at issue. If your website makes it appear that you sell products made by Company X, but in fact you make these products in your garage, Company X might accuse you of falsely designating the origin of (or "passing off") your items.


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Question: What are the limits of trademark rights?

Answer: There are many limits, including:

  • Fair Use
    There are two situations where the doctrine of fair use prevents infringement:
    1. The term is a way to describe another good or service, using its descriptive term and not its secondary meaning. The idea behind this fair use is that a trademark holder does not have the exclusive right to use a word that is merely descriptive, since this decreases the words available to describe. If the term is not used to label any particular goods or services at all, but is perhaps used in a literary fashion as part of a narrative, then this is a non-commercial use even if the narrative is commercially sold.
    2. Nominative fair use
      This is when a potential infringer (or defendant) uses the registered trademark to identify the trademark holder's product or service in conjunction with his or her own. To invoke this defense, the defendant must prove the following elements:
      • the product or service cannot be readily identified without the mark
      • he/she only uses as much of the mark as is necessary to identify the goods or services
      • he/she does nothing with the mark to suggest that the trademark holder has given his approval to the defendant
  • Parody Use
    Parodies of trademarked products have traditionally been permitted in print and other media publications. A parody must convey two simultaneous -- and contradictory -- messages: that it is the original, but also that it is not the original and is instead a parody.
  • Non-commercial Use
    If no income is solicited or earned by using someone else's mark, this use is not normally infringement. Trademark rights protect consumers from purchasing inferior goods because of false labeling. If no goods or services are being offered, or the goods would not be confused with those of the mark owner, or if the term is being used in a literary sense, but not to label or otherwise identify the origin of other goods or services, then the term is not being used commercially.
  • Product Comparison and News Reporting
    Even in a commercial use, you can refer to someone else?s goods by their trademarked name when comparing them to other products. News reporting is also exempt.
  • Geographic Limitations
    A trademark is protected only within the geographic area where the mark is used and its reputation is established. For federally registered marks, protection is nationwide. For other marks, geographical use must be considered. For example, if John Doe owns the mark Timothy's Bakery in Boston, there is not likely to be any infringement if Jane Roe uses Timothy's Bakery to describe a bakery in Los Angeles. They don't sell to the same customers, so those customers aren't confused.
  • Non-competing or Non-confusing Use
    Trademark rights only protect the particular type of goods and services that the mark owner is selling under the trademark. Some rights to expansion into related product lines have been recognized, but generally, if you are selling goods or services that do not remotely compete with those of the mark owner, this is generally strong evidence that consumers would not be confused and that no infringement exists. This defense may not exist if the mark is a famous one, however. In dilution cases, confusion is not the standard, so use on any type of good or service might cause infringement by dilution of a famous mark.


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Question: How do I know which marks are famous and what difference does it make?

Answer: Owners of "famous" marks have special privileges. They can block new uses of any similar name even if consumers wouldn't be confused by it. They are protected against "dilution" and "tarnishment" as well.

If you walk up to someone on the street and ask someone if they recognize the word or symbol, and they recognize it right away, it is probably famous. If you have to remind them ("The Berkman Center is this crazy thing at Harvard


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Question: What is this laundry list of things the C&D says will happen if I don't obey?

Answer: Your opponent may describe a parade of horribles to demonstrate with exquisite detail what it will do to you unless you capitulate. This list generally includes, but is not limited to:
(1) ceasing use of the allegedly infringing mark or surrendering the domain name;
(2) rendering an accounting;
(3) posting corrective advertising;
(4) obtaining an injunction;
(5) recovering costs and fees.

Though these things sound awful, they are not medieval tortures (although that may be a function of the fact that Torquemada never thought of them).

Ceasing use of the mark is self-explanatory: your opponent wants you to stop using the mark. Your opponent might also ask you to surrender your domain name if they believe the domain name causes (or is likely to cause) confusion with their trademark. For example, under ICANN rules (the UDRP), you may have to surrender your domain name if the following three conditions are satisfied:
(1) your domain name is identical or confusingly similar to your opponent?s;
(2) you have no legitimate right or interest in the name (in other words, you are not using the name to conduct a bona fide business or for non-commercial fair use purposes); and
(3) your name is registered and used in bad faith.

An accounting basically means that you disclose the following information to your opponent:
(1) the date you began using the allegedly infringing mark;
(2) the names of individuals who knew of the use when it began;
(3) the amount of traffic at your web site or business at your store; and
(4) your profits and revenues during the time you used the allegedly infringing mark.

Corrective advertising means you give notice to the public that you were using a mark confusingly similar to your opponent?s, and that you are not affiliated with your opponent.

An injunction is a judicial order to do something. An injunction can prevent you from using the allegedly infringing trademark.

Some provisions of the Lanham Act permit a trademark holder to recover attorney?s fees and court costs from an infringer.

That your opponent has listed these various remedies does not mean that it is entitled to them; do not confuse the smorgasbord of legal options with your opponent?s right to inflict any of them on you.


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Question: What does the "reservation of rights" language mean? What are they "waiving" at me?

Answer: Many C&Ds will say something like, "This letter shall not be deemed to be a waiver of any rights or remedies, which are expressly reserved." This is just legalese for saying, "Even if you do what we ask in this letter, we can still sue you later." The language is standard; do not be alarmed. Litigation is extremely unpleasant, and unless your opponent is irrational (always a distinct possibility, of course), it will not bring litigation after it has obtained what it wants.


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