• representations within the family circle;
• private copies;
• on condition that the name of the author and the source are clearly stated:
  • analyses and short quotes;
  • press reviews;
  • dissemination of certain speeches intended for the public;
  • reproductions of works or graphic or visual art intended to appear in a judicial sale’s catalogue;
  • representations or reproductions of excerpts of works for teaching purposes;
• parody, pastiche and caricature, observing the rules of the genre;
• acts necessary to access the contents of an electronic database;
• provisional, transient or incidental reproduction;
• exception for the benefit of the disabled;
• exception for the benefit of the libraries; museums or archive services;
• the reproduction or representation, in full or in par of works of graphic or visual or architectural art for information purposes;
• exceptions with respect to software;
• exceptions with respect to databases; and
• exception provided for with respect to the French Heritage Code, concerning legal deposit.

Some French organizations protecting and defending the authors’ rights have been challenging this initiative.  In an open letter to Hadopi, Authors and Composers French Syndicate (SNAC) and National Union of Authors and Composers (UNAC) complained that they had not been informed about the survey prior to its release.  They also challenged Hadopi’s authority in launching such a project.  They further wrote that “the philosophy of this questionnaire already shows a willingness to put into question one of the foundations of copyright by suggesting the possibility of creating and recognizing a genuine exception right to the exclusive property of the creator”, and refused momentarily to participate to the survey.

To many, the decision to open up the top-level of the Internet’s namespace has been a long time coming, creating a powerful tool to launch and/or expand brand marketing, promotion and overall recognition into a whole new realm.  However, taking advantage of these new opportunities will not be a simple process, and unfamiliarity with the complexity of registration and application protocols, as well as the array of technical, operational and legal issues that will arise, may be overwhelming to brand leaders and legal representatives alike.  Further, applying for and obtaining a new gTLD is not only time-consuming, but also extremely costly, with initial application fees of $185,000, coupled with overall integration and implementation fees, as well as ongoing yearly maintenance fees in the event that your application is approved at all.  

So what does this mean for you, and your company or association?  Below is a brief overview of the gTLD process, which should help you identify and analyze the associated benefits and risks that may present themselves. 

Navigating the gTLD Application Process

Many are familiar with the registration of a Second-Level Domain (“SLD”), the name, term or phrase to the immediate left of the “dot” in a web address.  For example, in digitalhhr.com, “digitalhhr” is the SLD.  The process for registering an SLD is simple, and in most instances, merely requires a brief search on the internet and payment of a small fee to one of several registrars like register.com or godaddy.com. 

The new gTLD application process is considerably more complex.  Unlike a simple SLD registration, any entity applying for and (if approved) operating a gTLD will ultimately become a registry itself.  ICANN has therefore established a comprehensive and lengthy approval process. 

As part of the submission, applicants are required to provide substantial background information, including information related to corporate and legal structure and financial resources.   In addition to such background screening, the initial evaluation period consists of two primary areas of review: (i) applicant review–where the entity applying for the gTLD (including all individuals named within the application) will be subject to assessment, including an overall examination of technical, operational and financial capabilities, and (ii) string review–where the applicant’s proposed gTLD string will be evaluated. The applicant review focuses on the applicant itself in order to assess whether it has the means necessary to operate a registry, and whether applicant’s registry services would adversely affect the security or stability of the Domain Name System (“DNS”).  The string review, on the other hand, focuses on the applied-for gTLD string in order to assess such issues as whether the proposed gTLD string would create a user confusion, adversely affect DNS security or stability, etc. 

According to ICANN, this initial period of evaluation may take up to 5 months or more and includes a public comment period.  Applicants who successfully complete this process (including surviving any formal objections that can be filed after publication of the completed application) will then be required to enter into a registry agreement with ICANN, as well as pass certain technical tests before the proposed gTLD is activated.  Overall the application process can take anywhere from 9 to 20 months, depending on the complexity of the application. In addition, all applicants will be required to pay a gTLD evaluation fee of $185,000, which shall be payable by the applicant as follows: $5,000 deposit upon applicant’s request for an application and the remaining $180,000 upon submission of the completed application.  Furthermore, applicants may be required to pay additional fees in certain cases, including where extended review is requested by those applicants that do not pass the initial evaluation. 

The New gTLDs and its Affect on Trademark Owners and Brands.

For many entities, the financial expenditure, coupled with the time, resources and personnel necessary to operate a gTLD registry may deter them from moving forward with the process at all.  But even if a decision is made not to affirmatively use the gTLD process to launch and/or expand a brand, companies must still be concerned with protecting their trademarks.

In the tangled web of major stakeholders, complex processes and potential pitfalls, companies are faced with the daunting task of assessing and implementing new protection and monitoring mechanisms in order to protect their trademarks and brands. ICANN itself has integrated several mechanisms within the gTLD program to help provide comfort to trademark owners, including:

• Formal Objection to gTLD Applications: At the close of the initial submission process in April, 2012, ICANN will publish a list of all applications to the general public, which will launch a period for filing formal objections to any application.  A formal objection may be filed on one of the following four grounds: (i) String Confusion Objection, (ii) Legal Rights Objection, (iii) Limited Public Interest Objection, or (iv) Community Objection. All properly filed objections will be subject to dispute resolution proceedings, which shall be administered by one of the following service providers, depending on the grounds for such objection: the Arbitration and Mediation Center of the World Intellectual Property Organization, the International Centre for Dispute Resolution, or the International Center of Expertise of the International Chamber of Commerce.  In the event that a gTLD is delegated, there will also be a post-delegation procedure to address issues that arise. Such objection procedures are set out in much greater detail in ICANN’s gTLD Applicant Guidebook.
•  Trademark Clearinghouse: The Trademark Clearinghouse is a centralized database, which will be provided, operated and maintained by ICANN, in order to store information in connection with third party trademarks. All trademark owners will be able to register their trademarks with the Trademark Clearinghouse. The Trademark Clearinghouse will be supported by individual registry operators through the establishment of individual Trademark Claims Services, as well as a “Sunrise” Process, as further described below.  
• Trademark Claims Service/Domain Name Registration During the “Sunrise” Period:  In accordance with ICANN’s procedures, all new registry operators must implement both Trademark Claims Services and a “Sunrise” Process during the initial period of general registration. The Trademark Claims Services will provide prospective gTLD registrants with notice of any third party trademark rights in and to the desired domain name, provided that such third party has registered with the Trademark Clearinghouse. However, such notice does not completely prevent the prospective registrant from registering such domain name. If the prospective registrant moves forward with the registration of such domain name, and it is registered in the Trademark Clearinghouse, the registrar will have to provide notice to the rights holder that such domain name has been registered.  In addition to such Trademark Claims Services, a “sunrise” period during the start-up phase for registration must be implemented in order to allow for eligible rights holders in the Trademark Clearinghouse first opportunity to register an SLD at the specific gTLD if a third party is seeking a sunrise registration thereof.  Notice to rights holders registered in the Clearinghouse will be provided by the registry operator upon requested registration by a third party. 

These are only some of the means that trademark owners, companies and brands can use in order to protect their marks. However, careful monitoring of ICANN’s application process and individual registrations, and prompt action, will ultimately be necessary on a moving forward basis in order to properly defend against the potential issues that may arise.     

What Now?

Whether you are an entity ready and willing to take on the challenge of registering a new gTLD, or simply looking to go on the defensive to protect your brand, devising the right strategy in response to the arrival of ICANN’s gTLD program is crucial for all brand owners.  

The DigitalHHR team has been working with clients to assist them in understanding the gTLD initiative, evaluating the potential benefits and pitfalls of moving forward with an application and assessing their brand protection needs, and are available to answer any questions you might have.  We will continue to monitor the progress of ICANN program as we near the start of the application window, particularly as details are made available regarding the Trademark Clearing House.

What exactly is “device fingerprinting”?  Every time a computer or other mobile device connects to the Internet, it broadcasts information about its properties and settings (such as which browser is running, screen resolution, speed of connection, etc) in order to interact smoothly with websites and other computers.  Device fingerprinting technology collects this information to build a profile that can identify the individual computer or device, and in some instances, the person using it. 

Before its adoption for online marketing, fingerprinting technology was primarily used to prevent software theft, providing a means to confirm that the subject application was only used on authorized computers.  Anti-fraud companies use the technology to identify devices that had engaged in fraudulent transactions to help them prevent similar occurrences in the future.  Privacy legislation proposed this July even advocated its use to identify consumers who had opted-out of online tracking.

But device fingerprinting could also allow for much more effective tracking of online behavior than other current technologies.  Where cookies can be blocked or deleted, it’s much more difficult to prevent fingerprinting or to delete a fingerprint after it has been collected.  One study, surveying 70 million website visits, found that a fingerprint of an applicable device could be generated 89% of the time whereas cookies could only be used 78% of the time.  One developer of device fingerprinting technology claims that it is even able to link the fingerprints of different devices that appear to be used by the same person.  Eventually, the company plans on adding offline activity to the individual’s profile, using email addresses and names the user entered while browsing the web to pull information from other databases.  By collecting, generating and selling this information to marketers, the device fingerprinting could become the basis to deliver targeted ads based on a consumer’s activity from their computer, mobile phone and other devices. 

Fingerprinting and other forms of digital tracking are currently legal but both federal regulators and several members of Congress have warned that the government will intervene if the online-advertising industry does not start doing more to protect consumer privacy.  Recently, the FTC recommended that a Do Not Track System be implemented if the industry doesn’t start coming up with its own solutions soon.  The FTC proposal would require web browsers to implement a do-not-track setting directly in the browser to enable end users to block web service providers, marketers and advertisers from monitoring their online behavior.  The FTC would then police companies that implement tracking technologies and tools to ensure that they comply with user requests.  The ad industry’s current opt-out system only allows consumers to opt-out of targeted advertising, not tracking altogether. 

The industry has taken notice.  Some marketing firms say that they will create an opt-out function if they adopt fingerprint technology, though the details of how that would work are still unclear.  Other initiatives include the “Open Data Partnership”, a service that would allow consumers to see what information has been collected about them, and opt out of being tracked by participating firms.  The service is intended to be a response to the government request for more transparency and consumer control.  Eight data and tracking firms have already committed for the service’s launch in January.  Microsoft has also revealed plans for a tool to block tracking in its next version of Internet Explorer.  The tool, once enabled, will allow users to block tracking attempts from specified web addresses used by tracking companies.  But in order to use the tool, users have to direct the browser as to which tracking attempts should be blocked by selecting from lists compiled by privacy groups and other outsiders.  There won’t be any default setting to block all tracking attempts.  Additionally, the tool will only block tracking by certain technologies, such as cookies and beacons.  It doesn’t address new technologies like digital fingerprinting and “deep packet inspection,” a form of monitoring which analyzes data as it travels from the internet to the computer. 

While support for consumer protections are gaining ground, the $23 billion online advertising industry warns that an end to tracking could also mean an end to the free web content that is currently subsidized and supported by targeted advertising.  And some members of Congress have expressed hesitation about any legislation that might hurt economic recovery.  Data tracking has also enabled the customized web experience that many consumers have come to rely on.  In order for any solution to be viable in the long-term, it will have to find some way to balance these competing concerns.  

In the coming months, we will continue to monitor this and other developments in the ongoing debate over privacy on the internet.

** Kathleen O’Donnell, who joined the firm in September, assisted in drafting this article.

As the public’s demand for “any content anywhere” grows, entertainment, media and technology companies are turning to the cloud for innovative ways to distribute and monetize content. Through initiatives like digital lockers, streaming to mobile apps, progressive downloading to tablet devices, and other forms of cloud-based storage and distribution, stakeholders are exploring new business models and ways to innovate without compromising the value of content or jeopardizing the rights of content owners to control how their content is consumed by the ultimate end user.

In this CLE-accredited Webinar, we will focus on the critical legal and business issues raised by the expansion of cloud computing and its impact on the distribution and consumption of entertainment content. We will analyze how cloud computing has led to new methods of distribution that give rise to an increased threat of copyright infringement and the recent case law impacting the cloud computing landscape. We will discuss new digital rights management tools, methods of end user, subscriber and purchase authentication. We will explore how stakeholders can balance complying with evolving standards, laws and regulations with the need to exploit new technological advancements that lead to improved services and enhanced end user experiences.

Our New Media, Entertainment and Technology Group at Hughes, Hubbard & Reed will be joined by our UK-based colleagues from the international Technology and Media focused law firm Taylor Wessing LLP. Taylor Wessing will address some key international and European issues that impact cloud models. These issues will include jurisdictional risks, different rights spanning different territories, advertising laws, collecting societies, the European laws on privacy, cookies and liability for cloud platform providers, as well as challenges related to format shifting/uploading consumers’ existing content into the cloud.

The webinar will be held on Thursday, December 9, 2010 from 12:30 p.m. to 1:30 p.m. EST.  To register, please click here.

While California Governor Arnold Schwarzenegger initially signed the Act in 2005, it has yet to be enforced.  In a lawsuit challenging the constitutionality of the law brought by the Video Software Dealers Association and Entertainment Software Association the , the United States District Court for the Northern District of California in August 2007 granted plaintiffs’ motion for  summary judgment and permanently enjoined enforcement of the Act.  We have previously written about that decision.

On February 20, 2009, the U.S. Court of Appeals for the Ninth Circuit affirmed the District Court’s decision.  The Court of Appeals held that the Act violates rights protected by the First Amendment because California failed to demonstrate a compelling interest supporting its regulation of protected speech, and even if it had a compelling interest did not narrowly tailor the restriction to that alleged interest.  Furthermore, less-restrictive alternatives exist that would further the State’s interests.  Finally, the Court held that because the Act is unconstitutional, the labeling requirement is also unconstitutional as the required labels would not disclose purely factual information but rather the State’s content-based opinion. 

The State of California  petitioned the United States Supreme Court for a writ of certiorari, which the Supreme Court granted on April 26.  The State filed its brief on the merits on July 12.  On July 19, eleven states filed an amicus brief in support of the California law, as did a number of other organizations.  The Respondents’ brief is due on September 10.  The Firm’s amicus brief on behalf of the ECA is due by September 17. 

The ECA is a non-profit membership organization that represents consumers of interactive entertainment in the US and Canada.  The primary policy of the ECA is to oppose legislative efforts that unconstitutionally restrict access to interactive entertainment. 

Bill Stein, Dan Weiner and Dan Doeschner of the Firm are representing the ECA.

It is not yet clear what the rationale is behind Apple’s new policy, how Apple plans to implement the policy and what it means for consumers and other players in the mobile advertising space.  Whether the policy will act as a blanket prohibition on development of geo-spam apps used primarily as tools for serving ads (i.e., ad-serving engines) remains to be seen.  In light of Apple’s acquisition of Quattro, some have surmised that Apple could be trying to curtail competition with its own products as its integrated advertising strategy evolves.  On the other hand, perhaps Apple’s intention is simply to protect its customers from apps designed solely to deliver possibly unwanted ads. 

The updated terms of Apple’s iPhone Developer Program License Agreement give Apple the right to “revoke the digital certificate of any of Your Applications at any time” meaning it can essentially kill an app.  This is not uncommon for end-user license agreements but could have widely felt ramifications for the more than 100,000 developers of iPhone apps.  Steve Jobs confirmed in 2008 that there is an iPhone ‘kill switch’ which allows Apple to remotely disable apps already installed on a device.  The terms of this latest developer agreement seems to allow that.  So while the language of the Apple Store Tip leaves open some ambiguity about how Apple will apply its policy regarding mobile apps, it now appears that the agreement every developer of apps must sign gives Apple the right to reject any app, including location based apps if it “has reason to believe that such action is prudent or necessary.”

Although this sector of mobile-advertising is still currently a nascent business, it is quickly growing as the use of GPS-enabled smartphones and other similarly equipped mobile devices become increasingly popular.  Companies, particularly smaller, local businesses, could increase their ability to reach potential in-market consumers and consumers may be better served by an improved user-experience.  Mobile advertising spending was estimated at just $416 million in 2009, compared with $24 billion spent overall on online adverting, but is expected to reach $1.56 billion by 2013and possibly more with the synergies of smartphones and mobile advertising companies. 

Excitement in the mobile ad space is tempered by the scrutiny of the Federal Trade Commission (“FTC”) and various consumer protection groups trying to balance privacy challenges and protection of consumers against the beneficial uses of new technologies such as geo-targeted ads.  A complaint filed last year with the FTC by the Center for Digital Democracy and the U.S. Public Interest Research Group asks for an immediate investigation into mobile advertising and certain practices in particular, which include location-based targeting. 

Currently, behavioral advertising in the mobile space, including location-based advertising, is subject to self-regulation.  But the FTC is continuing to look into whether, how, and to what extent more formal regulations may be needed to regulate emerging technologies.  To that end, it has scheduled a series of public roundtables to discuss proposals for regulations, including for mobile marketing. 

The FTC has long been interested in trying to regulate consumer privacy in the online behavioral advertising space by establishing guidelines.  The 2009 FTC Staff Report, titled “Self-Regulatory Principles for Online Behavioral Advertising” (which was the subject of a previous post in connection with online behavioral tracking technology), updates the FTC’s 2007 guidelines and emphasizes principles of “transparency and consumer control”; “reasonable security, and limited data retention for consumer data”; “affirmative express consent for material changes to existing privacy promises” and “affirmative express consent to (or prohibition against) using sensitive data for behavioral advertising”.  The FTC has said that the first principle of transparency and user control, which requires companies to notify consumers and give them the opportunity to opt-out of data collection practices, also applies to mobile technologies.  In addition the FTC’s efforts in the mobile advertising space, industry groups like the Mobile Marketing Association have established policies and guidelines and consumer best practices guidelines in connection with mobile advertising as well.

As the FTC continues to grapple with defining the parameters of mobile marketing guidelines and turning them into industry standards, key market players like Apple and Google will likely shape the mobile ad experience for service providers, advertisers and consumers alike.  At stake in this growing mobile-advertising sector is the potential for big money for service providers and advertisers and improved user experience for consumers weighed against possible privacy concerns.  We will continue to follow the legal and economic developments in this mobile-ad space and its implications for our clients.

The ”Act To Prevent Predatory Marketing Practices against Minors“, prohibits companies from collecting personal information–such as name and e-mail address–from minors without receiving verifiable parental consent.  The restrictions are considerably broader than the federal Children’s Online Privacy Protection Act (“COPPA”), applying to information related to everyone under 18 (COPPA is limited to children under 13) and extending to such information collected offline as well as on.  

If enforced, it would have compelled sites with broad appeal to teenagers, like Facebook and MySpace, as well as news, education and other sites requiring registration, to verify the ages of users from Maine and then obtain permission from the parents of minors from the state.  In addition, the Maine Independent Colleges Association, argued that the law would prevent Maine colleges from sending marketing materials to prospective students without first obtaining consent from their parents.

Before the attorney general decided to not to enforce the law, a group of companies including online advocacy coalition NetChoice (whose members include AOL, eBay, IAC, NewsCorp and Yahoo!, among others), challenged it in federal court, alleging that it violated the First Amendment and Commerce Clauses of the US Constitution and is preempted by COPPA.  The suit was dismissed last week on consent of the parties when the AG announced her decision.  However, prior to granting the dismissal, the federal judge to whom the case was assigned indicated that he agreed with the plaintiff’s that the law is likely unconstitutional.

The law was originally focused on protecting the health-related information of those under 18 in an attempt to prevent pharmaceutical companies from using such information to market drugs to minors.  As the proposed bill passed through the Maine legislature, “personal information” was included in the marketing prohibitions. 

While the potential upheaval to many companies that would result from enforcement of the Maine law was real, it does not appear that this law is signaling a trend by the states to dramatically expand the coverage of their privacy laws.  In fact, the law’s author, Maine state senator Elizabeth Schneider, admitted that she intended the law to be limited to health-related information.  Apparently, the broader coverage was added with little notice or debate.

The Maine Senate’s judiciary committee is planning on reviewing the bill in the upcoming legislative session in order to enact amendments to address the concerns that have been raised.  However, while the attorney general’s office will not be enforcing the law until then, the private right of action remains on the books.  It is unclear whether any such suits brought could survive a constitutional challenge on the same grounds as those brought in the dismissed lawsuit.  But the specter of incurring costs to defend any such suits hangs over any company conducting business online since doing so on the internet means doing business in Maine.

This post is password protected. To view it please enter your password below:

Password:

Click hereto subscribe to digitalhhr.

• Late last week,  Judge Louis Stanton of the US District Court for the Southern District of New York ruled that plaintiffs in the high-profile copyright class action case against YouTube could not seek statutory damages for videos that are not registered under US copyright law.   Judge Stanton also dismissed plaintiffs’ punitive damages claim, but did permit claims based on live broadcast footage, which were brought by the English Premier Football League, the lead plaintiff in the case, to proceed. 
• After a lengthy battle, record labels and online radio stations reached an agreement on new royalty rates for music streaming.  The new agreement treats web sites differently based on their size and model.  It only applies to sites making most of their money from streaming music, excluding webcasters that run online music services as a small portion of their total business.  Pure-play internet radio providers will have to pay the greater of 25 percent of revenue or a fee each time a listener hears a song.  The new per stream fees start at .08 cent for each song streamed in 2006 and increases to .14 cent in 2015.  Smaller sites will pay 12 to 14 percent of revenue in royalties.  The new agreement replaces a 2007 royalty rate decision. 
• Rosetta Stone, maker of the popular foreign language software programs, filed a trademark infringement suit against Google alleging that its AdWords program, which lets companies buy advertisements that show up as “sponsored links” next to search results, results in consumer confusion.  The complaint alleges that Google is letting companies attach their ads to trademarked words they do not own, as well as allowing companies to use those trademarked terms in the headlines of their ads.  As a result, a search for a trademarked company name may bring up that company, but it may also bring up results for the trademarked company’s competitors.  In recent years Google has been facing other similar lawsuits over its AdWords program but in April, the 2nd Circuit provided trademark owners with some clarity when it held that Google’s use of the trademarks were “acts of commerce”, reversing a trial court’s ruling and permitting trademark owners to proceed with their suits.