Subscribe

Category Archives: Legal

Brooks Social Media Bill
Passed by House


Brooks Social Media Bill Passed by House


 

Legislation introduced by Congresswoman Susan W. Brooks (R-IN5) – the Social Media Working Group Act of 2014 – was passed by the U.S. House of Representatives yesterday. By expanding the membership and influence of the Department of Homeland Security’s Virtual Social Media Working Group, the bill gives the private sector new opportunities to drive social media innovation in emergency preparedness and response. This is the third piece of legislation introduced by Congresswoman Brooks that has been passed by the U.S. House of Representatives during her freshman term.

 

 

“Social media has dramatically changed the way we communicate with each other and using it the right way can save lives when disaster strikes,” Brooks said. “This bill strengthens the Department of Homeland Security’s Virtual Social Media Working Group and gives private sector innovators new opportunities to share their expertise and ideas. This is the product of more than a year of witness testimony, background research and committee outreach indicating a need for greater collaboration between the high-tech industry, non-profit organizations and federal, state and local emergency response providers. This bipartisan legislation requires the working group to file a yearly report with Congress demonstrating new strategies for using cutting edge tools to keep people safe.”

 

 
The Virtual Social Media Working Group has held meetings since 2010. By requiring the group to file a yearly report with Congress, the legislation ensures members of the U.S. House and U.S. Senate have an opportunity to review findings and address areas of need. It will also ensure local officials receive more information on using social media to effectively disseminate critical information.

The legislation expands the diversity of voices providing expertise and offering solutions to policy makers. In addition to the current chair of the working group – the DHS Under Secretary for Science and Technology – the new working group will be co-chaired by a state or local official. The bill also requires members of the working group to come from outside of government. This will include representatives of the private sector, non-profit disaster relief organizations and academia.

The updated working group is required to hold its first meeting within 90 days of the enactment of the legislation. Its yearly report must address several factors including best practices, recommendations for improving the use of social media and information sharing, and a review of the training available on using social media.

Congresswoman Brooks held her first hearing on social media and emergency preparedness and response in June of 2013. Representatives from leading tech voices such as Google, Palantir, and the Internet Association provided expert witness testimony. Learn more about this hearing here.

Congresswoman Susan W. Brooks is a former U.S. Attorney for the Southern District of Indiana and Deputy Mayor of Indianapolis where she focused on public safety issues. To read her emergency preparedness and response op-ed in Social Media Monthly, click here. To learn more about the Subcommittee on Emergency Preparedness, Response and Communications, click here.

Cybercrime-as-a-Service (CaaS) Lets Hackers Rival Nation States

Cybercrime-as-a-Service (CaaS) Lets Hackers Rival Nation States

 
Cybercrime is stereotypically associated with lone-wolf hackers or loose syndicates of amateurs. Recent incidents such as the 2014 hacking of electronic highway signs in North Carolina (by someone security researcher Brian Krebs dubbed a “script kiddie“), as well as historical ones like the 2012 hacks of Skype, Facebook and Microsoft Windows using the widely available Blackhole exploit kit, seem to confirm such stereotypes of cybercrime as a dangerous, albeit niche, activity.
 

 
However, cybercriminals are gradually turning into professionals, capable of rivaling nation states for power and global reach. Rather than rely exclusively on low-hanging exploits or simple tools, they are crafting sophisticated malware and carrying out cyberattacks that can undermine network security, intercept transactions and harvest consumer data.

Mounting global costs of cybercrime shine spotlight on an increasingly professional industry

No longer just a concern for the IT department or security teams, cybercrime has become a serious time and money pit for entire organizations as its purveyors take up advanced tactics. Whether targeting corporate intellectual property or end user login credentials, cybercrime is a big business:

  • -A 2014 report from the Center for Strategic and International Studies, underwritten by Intel Security’s McAfee, estimated that cybercrime and cyberespionage cost approximately $445 billion annually. For context, that’s slightly less than 1 percent of world income and roughly on par with the global narcotics trade. The U.S., China and Germany each lost between 0.6 percent and 1.6 percent of GDP, mostly to IP theft. Hundreds of thousands of jobs could be lost to cybercrime’s effects.
  • -Underscoring the growing resemblance of cybercrime to traditional crime, digital bank heists, enabled by malware and surveillance, can be as effective as actual in-person robbery. Mt. Gox, until recently the world’s leading Bitcoin exchange, succumbed to persistent attacks and was ultimately raided of nearly $500 million in cryptocurrency. Similarly, cybercriminals made off with troves of payment card data from Target without having to set foot in many of the stores; instead, they exploited a remote HVAC connection and utilized malware.
  • -The former Soviet Union has become a hotbed for outfits that provide cybercrime-as-a-service. McAfee’s report asserted that there may be more than 20 cybercriminal organizations in Russia, Ukraine and elsewhere with expertise rivaling that of a nation state. Russia’s underground economy also offers botnets and exploit kits for as low as a few hundred dollars, as detailed in Trend Micro’s “Russian Underground 101″ report. Such sharing of information and resources has cultivated a highly capable cybercriminal community.

Cybercrime has become professionalized and globalized, with perpetrators casting wide nets as they look to cause lasting harm. Although such marked evolution of cybercriminal strategies and tactics is to be expected as powerful CPUs and network bandwidth become more readily available, it has been greased by growing financial lucrativeness.

Ill-intentioned hackers can steal assets not only from individuals, but also at scale from businesses via exploitation of weak infrastructure such as point-of-sale terminals or setup of wide reaching botnets that enlist thousands of infected endpoints. What’s more, they may be paid for sharing knowledge that contributes to these successful breaches, while benefiting from the massive repositories of already available resources that can be used to craft effective malware.

“In this era of electronic transactions, nothing screams ‘crime’ like a massive data breach, whether carried out by individual attackers or sophisticated cybercriminal gangs,” stated the authors of Trend Micro’s “TrendLabsSM 1Q 2014 Security Roundup” report. “Instead of going only after individuals, cybercriminals went after unusual targets like PoS terminals in retail chains.”

The Gameover Zeus botnet and the prevailing cybercrime business model

Professional cybercrime is indeed lucrative because of the opportunity to make millions from the theft and resale of sensitive data. In going after big targets such as banking networks, retailers and stock exchanges, cybercriminals have upped their games with the aim of netting more assets and money.

For example, the Zeus banking Trojan, which dates back to 2007, was heavily modified this year into a botnet called Gameover Zeus. This variant uses a decentralized peer-to-peer infrastructure that makes it difficult to take down. It can steal banking credentials from compromised devices and then use them to redirect wire transfers to accounts controlled by cybercriminals. Infected PCs are enlisted into the botnet and begin transmitting the CryptoLocker ransomware, which encrypts user files and demands payment before its timer runs out.

Law enforcement from around the world recently convened to take action against Gameover Zeus. The malware is estimated to have stolen more than $100 million, while CryptoLocker alone raked in $27 million just in its first two months on the market, according to the FBI.

Certainly, the massive amounts of money stolen in successful breaches and infections are helping sustain the current surge in sophistication of cybercriminal tactics and technology, creating a problematic cycle. There’s also the issue of cybercriminals receiving hefty sums to go after particular targets. This cybercrime-as-a-service business model is fueling growth in the potency of malware, which in turn can demand increasing fees from victims and interested parties alike.

“Someone who wants to infect computers with a particular type of malware would go to one of the organized crime groups and ask them – crime-as-a-service – can you infect 20,000 computers and for that we’ll pay you so much,” stated Paul Gillen, head of operations at the European Cybercrime Center. “They do that and they get a pay-per-infection rate. It is quite a sophisticated business model.”

Taking on professional cybercrime requires a joint effort from world governments as well as security firms. Modern technical solutions such as continuous monitoring and secure messaging must be used alongside better IP protections to curb the impact of advanced schemes.

Mutt and Jeff’s Guide to Managing Trademark Misuse on the Social Web

Mutt and Jeff’s Guide to Managing Trademark Misuse on the Social Web
By Kelley Clements Keller, Esq.

 

In 1907, cartoonist Bud Fisher introduced us to the comic characters Mutt and Jeff in what became the first daily comic strip in the United States.  A couple of un-average guys, Mutt was tall and thin and the mastermind of misdeeds.  Jeff was short and stocky and easily cajoled by his taller would-be pal.  A fanatic gambler, Mutt was always on the hunt for the next get-rich-quick scheme.  Jeff, his half-pint counterpart, tags along as Mutt’s (usually unwilling) partner.

Together, they make mayhem.Fast forward 100 years.  In the world of social networking, do you know a Mutt or a Jeff?  A “social” Mutt would be someone who seeks to make money fast, even if it means cutting (ethical) corners, and likes to play it fast and loose online.  A “social” Jeff would be someone who probably knows better but can be persuaded to do some of Mutt’s dirty work with the promise of a share in the spoils.  In the digital environment, the likes of Mutt and Jeff are particularly troublesome.  They epitomize the new challenges that arise as the law struggles to respond effectively to new technologies and more sophisticated forms of communication, e.g. social media.  They are smart, savvy, and ambitious and can outsmart even the best of the social wonks.  And if free-riding on the back of a good brand is an available option, they will be first in line.  Beware … Mutt and Jeff have logged-in!

 

 

New Sources of Old Problems

The ubiquity of the Internet in commercial activity has sparked rapid growth in the breadth and depth of trademark and unfair competition law and has forced a reconsideration of traditional trademark principles by the legislature, judiciary, industry, and the practicing bar.  By its very nature, the law remains in a state of rapid evolution during seasons of great technological growth.  And, the introduction of new technologies to an existing market, platform, or way of doing business always results in an upswing in litigation, resulting in new decisions from the bench and new legislation in Congress.

In recent years, we have seen Congress and the courts pass and interpret, among others, anti-counterfeiting, anti-cybersquatting, and federal trademark dilution statutes.  Recognizing the need for a modern application of sound legal principles rooted in trade identity law, the process for handling domain name disputes has been reworked (and reworked) and conflicts arising from keyword and other forms of deceptive advertising and marketing schemes on the Internet have been the subject of intense litigation and are squarely on the radar of the Federal Trade Commission.

The good news is that the body of trademark law is responding to our new reality of bits and bytes in a 140-character world.  The bad news is that it takes time and patience for lasting change to be implemented and frustration and confusion easily persist along the way.  It is during these periods of uncertainty that business owners and brand owners find themselves vulnerable to the Mutts and Jeffs of the world.  The lines delineating what activities are considered fair versus those that are unfair remain blurry and are difficult to tow.  This article will introduce three common areas rife with trademark misuse on the Internet and provide practical suggestions for brand owners to monitor the misuse and for unwitting infringers to avoid getting caught on the wrong side of the tracks.


Background

A trademark is a word, design, or a combination used by a manufacturer or merchant to identify its products and services and distinguish them from the products and services of others.  It is the name/logo by which consumers recognize, distinguish, and appreciate goods and services in the marketplace.  Ultimately, a trademark is a vessel for a brand’s reputation, goodwill, and commercial value and it symbolizes the social and economic power of customer loyalty.

A trademark does not have any inherent meaning or worth per se.  It accumulates value only after it is used – in commerce — to designate a particular brand of good or service.  Consider this:  the term GOOGLE has little to no value outside of its designation as the brand name for a search engine.  But, when used in a trademark manner, as the brand name for an Internet search engine, it has tremendous commercial, financial, and social value.  Likewise, the NIKE “Swoosh” has no inherent meaning or worth outside of its designation as a sports brand.  In 1971, Phil Knight paid Carolyn Davidson $35.00 to create the “Swoosh” logo.  Today, the brand has an estimated value of more than $14 billion.  Whether a brand’s commercial worth is $14.00 or $14 billion, its value is always diminished by trademark misuse.

The most fundamental goal of trademark law is to protect the public interest against deception in matters of trade identity by preventing one merchant or trader from free-riding on the goodwill and reputation of another and becoming unjustly enriched as a result.  Garden variety trademark infringement occurs when one merchant or trader uses a mark that is so similar to the trademark owner’s that it causes consumers to buy the infringing products when they really meant to buy the properly marked goods.  But, trademark infringement also occurs when the reputation and goodwill associated with a mark is injured by virtue of trademark misuse, even though it does not result in the diversion of sales.  This happens when an infringer uses the true owner’s mark (or very similar mark), usually on non-competing goods, in a way that suggests an affiliation with or sponsorship by the mark owner that does not actually exist.  This can lead consumers to ascribe unmerited trust in the infringer’s product or to assign blame to the trademark owner for the poor quality of the infringing goods and services.  The latter type of trademark misuse is prevalent online and can be easily promulgated through social media.

For this, and many other reasons, the advent of social media is a double-edged sword:  its immediacy and accessibility is at once a blessing and a curse.  Inasmuch as information can be disseminated to a limitless audience in mere seconds, viral marketing still has its magic moments on the social web.  But trademark owners and brand managers must be increasingly vigilant in monitoring social media activity that may injure the strength, reputation or goodwill in their various brands.  Policing misuse of valuable trademarks in the online space is no longer an option, it is an imperative.  As the maxim states, the best offense is a good defense.

Three Categories of Trademark Misuse in Social Media

1. Misrepresentation on the Internet as to Source, Affiliation, or Sponsorship

Use of another’s trademark that suggests an improper affiliation or sponsorship that does not actually exist is trademark misuse.  Activities that contribute to this type of misuse include using another’s trademark in a domain name or personalized username/sub domain with the goal of diverting Internet traffic to the infringing address.  (Holding the domain/username “hostage” until the true trademark owner pays up is cybersquatting, another category of trademark misuse.)  Using another’s trademark in website metadata or as a key word to increase search engine rankings may also be misuse, as are some types of web linking, deep linking, and website framing.  And, when any website or web address including any of these potential forms of misrepresentation is mentioned on or promoted through social media, the misuse is perpetuated — exponentially.

When the Twitter handle @LouisVuitton was first registered, it was not to the high-end retailer, but to an unrelated individual.  The harm in this case stemmed from co-opting a protected trademark in a manner that arguably suggested some type of tacit or implied affiliation with the Louis Vuitton brand.  The web address www.twitter.com/louisvuitton is now properly owned by Louis Vuitton Digital Worldwide.

A number of years ago, Uzi Nissan, the proprietor of Nissan Computer, a computer repair shop, promoted his company’s services through his websites www.nissan.com and www.nissan.net.  While the initial use of these sites was limited to computer repair services and the like, the company began to display car-related advertisements and links to other car merchandisers on its websites.  Nissan Motor Co., owner of a federal trademark registration for the mark NISSAN for automobiles, sued.  The court held that posting car-related advertisements and car-related Internet links on Nissan Computer’s websites was trademark misuse in that it created increased advertising revenues given the diversion of a consumer’s initial interest in NISSAN branded vehicles.

To mitigate this type of trademark misuse, start by taking some practical “self-help” measures.  First, buy up the domain names that comprise your most important marks (and slight variations) for all available top level domains, e.g. .com, .net, .org, .info, and so forth.   Next, register your important brand names as usernames on relevant social media sites, familiarize yourself with their use policies, and follow the established protocol for registering complaints.  Finally, establish Google Alerts for your important marks and monitor the results.

2. False and Misleading Advertising:  Comparative Use v. Disparagement 

Comparative advertising, aka “my product is better than yours” advertising, is an appropriate marketing technique provided the content of the advertisement is straight-forward, truthful, and non-deceptive.  The strategy of comparing products is very effective and particularly helpful for newer brands trying to gain recognition relative to industry standards.

In the early 1970s, the Federal Trade Commission showed public support for this type of advertising on the basis that it is more informative for consumers.  Since then, we have seen the comparison wars being fought on many fronts on a daily basis.  You may recall Wendy’s “Where’s the beef?” (and, more recently, “Here’s the beef!”) campaign to promote the quality of its meat over other fast food burger shops.  AT&T and Verizon have relied heavily on comparative advertising in their intensely heated battle for mobile customers.  And to smooth the way for its entry into the coffee market, Dunkin’ Donuts took Starbucks head on in comparative ads by emphasizing the different price points and appealing to a broader class of customers.  Not until an advertisement includes false or misleading statements about another’s products or services does the comparative use become a disparaging, and actionable, misuse.

The impact of this format is enhanced when used in social media.  Not only can the visual effects of a television ad be replicated online, but important keywords and hashtags embedded in a post can help to spread your message.  Moreover, advertising activity through social media is necessarily an interactive process that engages both advertiser and customer.  Herein lies the risk.

Beware of mission creep!  Stay true to the original goal of fairly touting the benefits of your products in relation to another’s.  Encourage customer feedback, but actively monitor their posts and delete any that include disparaging content on pain of being held responsible for their actions.  Failure to monitor the interaction between advertiser and consumer may be construed as an implicit endorsement of the consumer’s position and impute unwanted legal liability.

3. Watering it Down:  Dilution by Blurring or Tarnishment

The goal of trademark dilution law is to protect the business reputation and distinctiveness of well-known trademarks from deterioration caused by another’s use of the same or similar mark on unrelated products or services, e.g. KODAK bicycle, GOOGLE grocery store, CHEWY VUITTON dog toys.  The harm to the trademark owner comes from a gradual whittling away – or dilution — of the positive image each mark conjures in the public’s mind by its use on these non-competing goods.  This erosion is directly translated to economic harm when it results in reduced sales and/or advertising revenues.

There are two types of trademark dilution:  dilution by blurring and dilution by tarnishment.  Blurring occurs when a distinctive mark is used on non-competing goods in a way that weakens, or blurs, the mark’s ability to bring to mind a particular product, e.g. a KODAK bicycle or TOYOTA computer.  Tarnishment occurs when a distinctive mark is used in a distasteful or inappropriate manner such that the positive associations engendered by the mark are diminished, or tarnished.  In essence, it lessens the commercial appeal of the mark, e.g. The TIFFANY Tavern, BUTTWEISER t-shirts, CHEWY VUITTON dog toys.

It can be tempting to purchase a domain name that contains a famous trademark and connect it or redirect it to a different website that promotes wholly unrelated goods or services.  The same goes for co-opting well-known brand names for usernames and other social media handles/URLs.  However, even if your efforts are not intended to cause harm to the trademark owner, but simply to give yourself a boost, you just might land in the middle of a mess, a federal trademark lawsuit mess.  Caveat emptor!  Innocent infringement is as actionable as willful infringement, so steer clear of the danger zone.

The Path Forward

Social media is still a very new platform for promoting and conducting commercial activity.  As social technology continues to advance and we transition into the era of the semantic web, the law will work to stay apace and promises to provide measured guidance along the way.  Historically, trade identity law has shown itself to be flexible and malleable in the face of technological change and has demonstrated the ability to respond effectively and often just in time before Mutt and Jeff cause too much trouble.

Kelley Clements Keller is the Founder & Managing Member of The Keller Law Firm. Her practice focuses on a broad range of domestic and international intellectual property issues, with an emphasis on trademark and copyright matters, licensing and enforcement of intellectual property rights, and providing counsel and advice on brand expansion and management, domain name disputes, copyright protection, and new media law.  She works closely with patent attorneys skilled in various arts to assist clients in determining the best protection strategy for their inventions.