Category Archives: Law

Occupy Wall Street Defectors Want to be 1 Percenters

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occupy wall streetIt looks like there are one or more “Occupy Wall Street” defectors. Apparently someone in the 99% wants to be in the 1%. A couple Trademark applications have been filed for the following three marks related to the Occupy Wall Street movement. Take a look at the goods and services below, such as bags, shirts, photos, videos, entertaining materials, all types of clothing and more. Interesting that some of them want to profit from this. I guess there are some Occupy Wall Street defectors.

This information is public and freely available at the USTPO

Mark 1
Application Serial Number: 85454550
Word Mark: OCCUPY WALL STREET
Goods and Services:
Periodicals and newsletters. Bags, including but not limited to backpacks, gym bags, tote bags, luggage and overnight bags. Clothing, namely t-shirts, sweatshirts, headwear, and jackets for men, women and children. Entertainment services, namely, providing a web site featuring photographic, audio, video and prose presentations featuring educational and entertaining materials relating to Occupy Wall Street and the Occupy Movement Generally.
Filing Date: October 24, 2011
Owner (APPLICANT):
Occupy Wall Street AKA Friends of Liberty Park GA Victoria Sobel (US),
Pete Dutro (US) UNINCORPORATED ASSOCIATION NEW YORK
10 Spring Street
Suite 1
New York NEW YORK 10012

Mark 2
Application Serial Number: 85454831
Word Mark: OCCUPY WALL STREET
Goods and Services:
All purpose sport bags; Backpacks; Backpacks; Backpacks, book bags, sports bags, bum bags, wallets and handbags; Beach bags; Canvas shopping bags; Carry-on bags; Gym bags; Hard-sided and soft-sided carry-on bags and gym bags; Overnight bags; Sack packs, namely, drawstring bags used as backpacks; Schoolchildren’s backpacks; Umbrellas. Footwear; Golf shirts; Hats; Headwear; Hooded sweat shirts; Polo shirts; Shirts; Short-sleeved or long-sleeved t-shirts; Sweatshirts; T-shirts; Tee shirts; Wearable garments and clothing, namely, shirts.
Filing Date: October 24, 2011
Owner (APPLICANT):
Fer-Eng Investments, LLC DBA Fer-Eng Investments, LLC LIMITED LIABILITY COMPANY ARIZONA
PMB 9, PO Box 5000
Rancho Santa Fe CALIFORNIA 920675000

Mark 3
Application Serial Number: 85449710
Word Mark: OCCUPY WALL ST.
Goods and Services:
STICKERS+BUMPER STICKERS
BAGS, INCLUDING HOBO BAGS, TOTE BAGS, GYM BAGS, SPORT BAGS, OVERNIGHT BAGS, BEACH BAGS, BACK PACKS, CARRY ONS, UMBRELLAS. CLOTHING; SHIRTS, SWEAT SHIRTS, HEADWEAR, FOOTWEAR
Filing Date: October 18, 2011
Owner (APPLICANT):
Maresca, Diane
UNITED STATES
688 pat drive
West Islip NEW YORK 11795

AdWords and Trademarks – It May Not Be What You Think

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Are you familiar with Google AdWords policy on Trademarks in advertisements placed on Google or throughout the Google network? You may think you know their policy on Trademarks, and you might, but just to be sure read on and consult Google’s policy.

Background on AdWords & Trademarks

Google AdWords
Google AdWords allows you to place an advertisement on their site or across their network. You pay when people click your advertisement, what is known as Pay Per Click (PPC). They also provide display advertising and video advertisements. Most of the advertising is text.

Trademarks
Instead of getting into the details of trademarks and service marks here is some reference material. In the United States there are three levels of rights to be aware of. First of all there is common law that may afford you rights in a mark through use of the mark, then there is State by state registration (more here at FindLaw), and finally federal registration of Trademarks from the U.S. Patent and Trademark Office.

AdWords and Your Trademark

adwords trademarksLet us assume your Trademark is Kleenex. You may not want anyone to be using your trademark in their advertisements for a variety of reasons. This is a common issue with advertisers that have affiliates and they tell their affiliates they cannot bid on keywords or phrases that have their trademark such as Kleenex. Many people believe you can simply tell Google not to allow others to put your trademark in their advertisement or bid on your trademark as a keyword. Then Google will not allow it. If that is what you assumed, that is not entirely correct.

From Google’s policy note the following:

Please note the regions where we will investigate ad text only. We will not disable keywords in response to a trademark complaint in these regions.

So they will investigate use of your trademark within the advertisement text however they will NOT disable the bidding of your trademark as a keyword. This means that if your trademark was Kleenex competitors of yours could bid on the keyword Kleenex. When someone searches on the word Kleenex your competitors can place an advertisement such as “Buy the best tissues around, get them here”. Here on the Google AdWords policy on Trademarks there are two links that expand. One that shows the regions that they investigate ad text only and those that they investigate ad text and keywords. Note that in the United States they only investigate ad text and not the keywords, also note that in most regions they only investigate ad text. There are probably many reasons why, one of course being the fact that the more keywords people can bid on the more money they can make and trademarks just may be a significant chunk of revenue.

Most importantly you need to understand how Google does and does not assist you with Trademark monitoring.

FTC Initiative Do Not Track Consumers

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The FTC issued an online privacy report which has been deemed the “Do Not Track” report. You can find the FTC Release Here. Here is a quote from that release:

The proposed report also suggests implementation of a “Do Not Track” mechanism – likely a persistent setting on consumers’ browsers – so consumers can choose whether to allow the collection of data regarding their online searching and browsing activities.

Maybe I am thinking too much but it seems odd that they would assume it is their decision to determine how to implement a feature in a browser. They actually say it is “likely” to be a persistent setting on consumers’ browsers, that strikes me as odd. That is like your boss saying “we have a problem and you need to fix it, so you have three choices A, B and C, and by the way I think it is likely you will choose C and as you know I can cause you harm, of course do whatever you like but I have a gut feeling you will choose C.”

I am not saying this report is not helpful and due to cases of abuse by companies online, it is welcomed. I just found that statement very interesting. You can find links to the privacy report itself on the right sidebar of the FTC Release Here.

Restore Online Shoppers Confidence Act

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Bill Related to Online Sales
An interesting Bill passed, S.3386 Entitled Restore Online Shoppers’ Confidence Act, can be found here at OpenCongress which is a great site by the way. You can read the entire text of the bill at this site. There have been issues online of unscrupulous marketers doing more than just fulfilling the initial customers order. From selling the customers information without the customers consent and in some cases passing along the credit card information to make a second purchase of another item or service on behalf of the customer without their knowledge or consent. The desire of this bill is to combat those individuals head on. To better understand the bill itself read it here with the additional commentary (and funny) from attorney Mike Young.

Regulating Privacy before the Government Does

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Privacy Self Regulation
Having been in online advertising since it’s infancy I have seen and dealt with online privacy issues. At one time we built a banner ad server as well as a permission based email platform in the 90′s. Also as an intellectual property attorney I have dealt with the legal issues surrounding privacy and privacy policies. This has always been a fascinating issue. In many cases the government allows an industry to either regulate itself or else they will step in and regulate it for you.

The U.S. government, through the Federal Trade Commission, has been calling for more stringent regulation of online behavioral advertising practices. A group of associations put forth a self regulatory program in 2009. The associations are: American Association of Advertising Agencies (4A’s), American Advertising Federation (AAF), Association of National Advertisers (ANA), Direct Marketing Association (DMA), and the Interactive Advertising Bureau (IAB), with support from the Council of Better Business Bureaus (BBB).

There is a webinar being put on by the DMA which you an find here, to learn more.

Affiliates in Colorado It Is Time to Move

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Here is more in the online taxation and affiliate issue. Originally we noted that states such as Colorado passed laws at an attempt to obtain sales tax on sales that were considered to have been originated through an affiliate in their state. Originally it was Amazon that took the first step and you can read the original article here entitled Law Dictates Behavior where Amazon’s response was to simply terminate all affiliates in Colorado from their affiliate program. Now the domino’s fall.

First it was Amazon, and today I see a smaller online retailer with an affiliate program that you may or may have heard of. Regardless I will remove their name and show you the email text here:

Dear XYZ,

Due to the recent tax laws regarding nexus involving online affiliate publishers in the state of Colorado (legislation known as HB 10-1193) we will no longer be able to accept new publishers from Colorado into our affiliate program.

Additionally, we will be immediately terminating our relationship with any publishers that were already joined. We sincerely apologize for the abrupt interruption in the program if this affected your account directly. This, unfortunately, affects our ability to continue business with loyal publishers and we understand that we are losing valuable relationships due to these new laws.

Your publisher account will be closed as of May 18, 2010, and we will no longer pay advertising fees for sales referrals after that date. All sales made prior to May 18, 2010 will be credited to you and paid out in accordance with our regular schedule on June 10, 2010. Please accept our apologies and we appreciate your understanding. Hopefully in the future, these laws will be reversed in order to keep the networks diversified and growing.

Kind Regards,
ABC

Not sure why I got it as I am not a Colorado based affiliate. However there you have it. The wheels have been set in motion and those that have sites relying on affiliate revenue within certain states may have to move. Of course that begs another question about the business with the affiliate relationship and where they are incorporated, or where their entity is considered to reside, verse where the employees or owners reside. Could it be as simple as just re-incorporating in another state and obtaining a post office box? I don’t know for sure but I feel for those that may have to either shut down their business or move their business and families to another state.

Legislation of Ecommerce

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Legislation of e-commerce is becoming more interesting by the day. Recently I wrote about the sales tax issue and Amazon. The first article pointed out the fact that Law Dictates Behavior and there may be unintended consequences, then there was the issue of North Carolina wanting your sales tax. Now another very interesting topic of how Massachusetts passed a law effecting how personal information is saved in databases. Here is a well written article with more detail entitled A New Law Could Change the Way You Build Database Applications by Brian Moran. Yet another well intentioned legislature may have taken a shot in the dark but definitely hit something.

Massachusetts Law
On the Massachusetts site you can find a list of sources for FAQs and more regarding this law and other Identity theft issues found here. What is most interesting to me is not the fact that they are trying to deter identity theft, that is excellent as the intentions are good, but it often seems that legislation may be rushed and in a area that should be self regulating by market forces.

The Law
The law is related to how the PII (Personally Identifiable Information) of Massachusetts residents is to be stored and accessed (Massachusetts data security law, 201 CMR 17.00). Not only to be safe from those gaining access to the data online but also from those that work for the company storing the data and their access. Note that the fine is $5,000 is per record – in other words per individual.

Unintended Consequences
Legislation often has unintended consequences. Clearly those businesses within the borders of Massachusetts need to be sure they comply with the law. However potentially they are only at risk of being fined for the breach of Massachusetts residents information as opposed to other states.

Other States
Regardless, what about businesses in other states that have customers from Massachusetts? The Massachusetts government answers that question with a simple “that’s easy, all other businesses in the other states will protect the data, as we dictated, of Massachusetts residents therefore we have effectively protected our residents while conducting business or purchases in other states” (disclaimer: I made that up, no one said that, I’m just guessing – however I am a pretty good guesser), then they pat themselves on the back.

But let’s not forget what happened when states decided to request sales tax from Amazon when affiliates resided in that state and were the catalyst for the sale – quite simply Amazon essentially “fired” all the affiliates in that state. Clearly that was not intended by the legislature when they enacted the law.

In this case we can all foresee businesses looking at their customer base and deciding what to do. Is it worth attempting to comply with this law regarding out of state residents if you are a business that is not within Massachusetts or would it just be easier to not sell to residents of Massachusetts? The answer may be “don’t sell to residents of Massachusetts”, of course if they are a significant amount of revenue you may want to comply. The other issue is the business could say to themselves “we are not going to comply, come and get us”. Either way, why is the government involved in the first place? Can’t the market decide? Is it not in the best interest of the business to keep all it’s consumer data safe regardless of where they reside?

Let the Market Decide
After reading the Massachusetts FAQ and Compliance checklist it is clear that they (the government) have the same goal as the business – to protect customers information. Here is the difference, if the business loses information or has a breach the government has already decided on the penalty which is a fixed fee per record or individual. However the customers of the company will voice their frustration with their wallet and decide to leave if the infraction was considered to be worthy of losing their business regardless of any law. With a predetermined government fine a business will do a cost benefit analysis right now. However the business cannot determine how consumers will react and whether they will lose business. It is quite possible the business will over-protect in the latter case. Either way, the business will have potential negative consequences in their revenue if consumers deem the infraction to be worthy of walking away.

In my opinion you let the consumers decide on what a business needs to focus it’s time and attention on. A business has limited funds and limited resources, why is the government telling them how to spend their time and money?

North Carolina Wants Your Sales Tax

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Following the previous post about how Law Dictates Behavior and how Amazon dropped affiliates from their program from certain states, here is more in the sales tax debate. To recap the article, essentially various states decided to enact legislation to have online retailers collect sales tax: Colorado, Rhode Island and North Carolina. The argument set forth by the states is that they want sales tax collected by an out of state online retailer (ie Amazon) for items bought by residents of the state if the resident got to the online site through a resident affiliate. Amazon’s response was “okay then we will, and did, terminate all affiliates in that state”. Clearly this was not the intention of the state but obviously the state did not think it through. Now it gets even more interesting. As I have been involved with online businesses for well over 10 years and an attorney (no longer practicing) I call this “fun” – that is the battle between business and legislation. A good cat and mouse legal battle resulting in constant unintended consequences from state legislation is for some reason amusing to me, I guess it is just the entrepreneur’s mindset that we will go around or over any barrier put in front of us. Anyway, here is the latest.

North Carolina Wants Back Taxes from You
If you live in North Carolina and bought from Amazon in the last couple of years do not be surprised if you get a sales tax bill. Well maybe not directly, maybe from Amazon or Amazon may just take the hit, and maybe not at all. However North Carolina is attempting to obtain all the records of North Carolinian’s that bought items from Amazon since 2003. They, Norht Carolina, believe the states residents may have purchased close to 50 million items since August 2003. Excellent coverage and more details at Tech Journal South. Amazon is attempting to block North Carolina’s attempt to obtain Amazon’s records of purchase by North Carolina citizens.

My 2 Cents
Here is my 2 cents, stop. Stop North Carolina stop. Maybe instead of taking every last cent of your citizens with taxes you could better use your time to help spur your own states economy and increase the prosperity of all residents which may yield higher home prices, higher assessments, and higher revenue collections based on those assessments. Of course I am not an economist so I really have no idea what I am talking about, I just think as a state I rather take money from my citizens when they are making more themselves as opposed to when they are making less or out of work. How about spurring economic growth with some tax incentives for small business or investing. Anyway, I digress, will still be fun to watch NC and Amazon battle it out.

Law Dictates Behavior and Affiliates Get the Ax

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I do not know the originator of this quote, nor my law professor that I first heard this from – but it stuck with me.


“Law Dictates Behavior”

My disclaimer: I cannot confirm that any of the events below actually took place, I have made up these fictitious events and sprinkled them with sarcasm.

Consider the Consequences
It can be very frustrating when decisions are made without fully considering the consequences. There are always multiple potential outcomes and not always the ones you may want. This is particularly frustrating when legislation is considered or enacted. The knee jerk reaction to regulate everything is debatable by many. Sometimes communication with the parties involved before enacting new legislation can help to counteract negative consequences. This does not just apply to legislation, even with your own business you need to always consider the consequences or you leave yourself open to unfortunate ramifications.

Oops I Didn’t Think That Would Happen
Unfortunately as I read the stories of Amazon and affiliates in various states I have to wonder if someone said “I bet if we do X then Y will happen, oops looks like we were wrong and Z happened instead.”. What I am referring to are the various states that decided to enact legislation to have online retailers collect sales tax: Colorado, Rhode Island and North Carolina. Here is what they decided to do and say.

You Have Affiliates – Give Us Sales Tax!
In a nut shell these states said to themselves we want sales tax collected by an out of state online retailer for items bought by residents of our state if the resident got to the online site through a resident affiliate. Therefore the online retailer has a presence in our state through affiliates. They then smiled and said “Cool, we just solved our budget problem, instead of spending less we can just increase taxes and generate more revenue – we are sooo smart.”, after which there were high-fives all around.

Then Amazon, which generates phenominal revenue and has thousands, if not tens of thousands of affiliates, said “Wow, that is a huge operational cost and we do not want to take it on so we will just cut ties with all those affiliates in your state. Let’s just do a quick database query for all affiliates where state==Colorado, Rhode Island, and North Carolina. Okay now a quick email that explains they are no longer an affiliate, bye. [click send]. There, done, problem solved.”

So states like Colorado thought if they added sales tax due to affiliates in the state (X) then they would increase revenue through the sales tax from those like Amazon (Y), but did not consider (Z) that Amazon would just let those affiliates go. It seems that the law did indeed dictate behavior, just not the behavior the law makers intended. I for one hope the lawmakers at least had a discussion with Amazon and others prior to enacting such a law, otherwise they played loose with their own tax paying residents sources of income.

What Will Other States Do?
Now it will be very interesting to watch and see what other states do. What is most interesting to me is that fact that all of those that were just fired as affiliates due to their state laws may just leave that state. Now the states have two unintended consequences, they did not obtain the additional revenue and they lost a group of tax paying citizens – oops.

Conclusion
Much like you may incorporate in a state that is not your own due to the laws, and case law, that exists for corporate entities, you may now need to choose your state of domicile based on state e-commerce laws. Fascinating.

Here is the associated press article, and you can find others with regard to North Carolina and Rhode Island online as well.