Property Rights in Cyberia a Study of "Intent" and "Bad Faith": A Case Study in the Adventures of Creating Property Rights in Cyberspace

Article excerpt


The primary objectives of this Case Study is to address the dynamics and challenges of harmonizing present day business practices that may be impacted by traditional legal concepts, identifying current government/international organization regulatory initiatives that influence Internet policy, and coordinating case law principles that have application to resolving business disputes pertaining to "Cyberspace Property" status and other related property activities on the Internet. This Case Study provides primary subject matter insights into complexities of intellectual property rights as related to Cyberlaw principles and E-Business activities that have been profoundly effected by recent technology changes. Another important aspect within the framework of this environment of changes are the continuing dynamics of Internet oriented commercial activities and its effects on managing and conducting business transactions, both locally and globally. In this instance, intellectual property rights, commercial activities, and the business transaction process are directly related to each other and have profound effects on business outcomes.

Secondary issues examined in this Case Study pertain to numerous "ethical dilemmas" created by commercialization of advancements in technology and, again, the effects that such "changes" have on law and the business community. Also, within the context of intellectual property issues, U.S. Constitutional issues and criminal activities will be evaluated. Additionally, student preparation for the Case Study is exclusively assigned to On-line legal research activities.

This Case Study has the difficulty level of two or three, and is suitable for sophomore and junior course work in "Legal Environment of Business" or "Business Law." It is also applicable to various specific topics within E-Business/E-Commerce curricula (e.g. E-Marketing, E-Law, E-Strategy/ Policy among others). Primarily, it is designed as a supplement and update to materials introduced in textbook chapters relating to intellectual property and Internet law. This Case Study may be taught in a cumulative four-hour class session(s) and requires four hours for student preparation.


The pioneering journey of this Case Study explores new and exciting adventures of virtual property rights in the world of Cyberspace. The objectives, in this instance, is to investigate on the merits the facts of this spirited Case Study and determine current relevant issues relating to Online/ Internet oriented Cyberlaw principles that are directly applicable to contemporary practical business approaches and will help reveal and solve some of the mysteries of Cyberjustice trends. Key material factors are addressed specifically through uniquely fashioned commercial events enumerated within the Case Study during an exhaustive fictitious 30 day period. A sampling of topics include: Cybertrespass, Cyberstuffing, Pagejacking, Spoofing, Cybersquatting, Cyberpiracy, Typosquatting, Protest Domains and Cybergripers, Metatagging, Keywording, Linking, Framing, and Mousetrapping.

The second feature of this Case Study is in teaching specific On-line business and legal research skills. All student preparation is Internet based. "Student Instructions" include an exhaustive section pertaining to On-line research.

This is where the virtual rubber hits the virtual road. The "Student Instructions" also includes a number of detailed instructions and approaches that address the formulation of case issue/issues through the process of understanding the basic operative facts enumerated within the fictitious 30 day period of the basic Case Study and by applying legal principles most suitably related to the stated facts that will essentially establish the rule of law for each identified issue. Next, the transition from the previous process of establishing the issue is to present the reasoning and analysis of why there is application of the law in resolving the original dispute as presented by the stated facts. Finally, the conclusion states the outcome in a definitive style that establishes the results of the decision making process. The hope at this point: predictability, stability, and continuity. Students use a combination of "Student Instructions" that follow the Case Study, evaluation of the fictitious 30 day period of facts presented in the Case Study, and On-line research in the learning process. Finalization of the process is extensive and challenging student discussions in the classroom. [Hint: The outcome of this Case Study ends with a twist of fate not foreseen by Dr. Ima Goode and Dr. Rob M. Phast, competing university presidents.]


Case Study Objectives

1. To investigate the facts of this Case Study and determine relevant legal principles for Online Cyberlaw issues that are appropriate and applicable to practical business approaches in supporting intellectual property rights solutions and that help reveal and solve some of the mysteries of Cyberjustice.

2. Formulate finalization of the case issue/issues through understanding the basic operative facts enumerated in the case and by applying legal principles most suitably related to the stated facts that will essentially establish the rule of law for each identified issue.

3. Reasoning and analysis of why there is application of the law in resolving the original dispute as presented by the stated facts.

4. State the outcome in a definitive style that establishes the results of the decision making process.

5. Establishing opportunities to develop business relationship skills that are applicable to team and group projects.

6. Improving skills for conducting legal research On-line.

Case Study Concepts and General Teaching Instructions

A suggested approach in meeting the objectives of this Case Study is to develop a series of sequential "issues" from the operational/material facts. The facts start with descriptive comments in identifying "Old Ivy University" and "International Olympic University." These specific facts may be pertinent to the "dated" facts that follow and are identified as "Additional Facts." Each paragraph under this section is identified by a calendar date. Generally, each date presented has at least one issue buried within the facts of each such paragraph. The issues being developed relate to Internet Domain Name problems, and specifically to Cybersquatting and subtopics of Cybersquatting. There are also several secondary issues that will be addressed in class that will supplement many of the primary issues, such as intellectual property, Constitutional Law, and criminal law. Student preparation should include following the "Student Instructions" by (i) reading the full text of the facts for the purpose of developing issues of this Case Study; (ii) reviewing the "vocabulary;" (ii) being familiar with the suggested "organizations and laws" as listed; (iii) reading/briefing of the "cases" as listed; and (iv) developing issues for discussion during class time.

The flexibility of this Case Study is designed for several possible approaches in the student preparation stage and the class presentation/participation stage. First, the entire class may be assigned to research, present, and participate as a whole, each student being responsible for all issues of the case. This approach requires more out-of-class preparation time for students. Another approach is assigning groups/teams and/or individual students a specific issue or topic (or dated paragraph) from the Case Study. This requires more coordination and planning on the part of the instructor. A final approach is to formulate this Case Study into a seminar or special session format that may be suitable for a more in depth analysis and study.

Another feature of this case study is the challenge of conducting legal research On-line. The exercises are designed to improve On-line research familiarity and skills as to: (i) finding and using of legal dictionaries to understand the "jargon" and specific meanings for key words and phrases; (ii) finding and reviewing U.S. government agencies, especially as to specific delegated authority pertaining to the subject matter of the issues; (iii) finding and reviewing pertinent U.S. statutory and regulatory laws relating to the issues; and (iv) finding federal and state court decision citations that are directly related to the issues. Legal research, in this instance, is the basic process of identifying and retrieving material information that is necessary to analyze and support the specific relevant "issues" throughout this Case Study.

An additional attribute of the Case Study is the prospect of expanding the facts to include a number of other issues relating to other topics within the course. Essentially, the instructor could develop factual extensions that would include issues involving contracts, torts, property, etc., that parallel any text in a "Legal Environment of Law" or "Business Law" class. Students would be familiar with the original facts as presented within this Case Study (the parties, locations, time elements, etc.), and, as such, would easily transition the existing story line to include a factual basis for addressing additional issues. This approach was not part of this paper, but is a topic for a future article.

The overall approach of this Case Study is to provide a forum for discussing all sides of an issue, that is, the various and possible conflicting beliefs, expectations, and alternatives derived through classroom interaction. Yes, there will be agreements and disagreements as to conclusions, but the process promotes developing and supporting rational resolutions on the part of each participant. A key ingredient to the Case Study exercise is in providing a process of reaching conclusions. This is a problem solving pursuit.

We believe that this Socratic type method of analysis supports applications of critical thinking and problem solving techniques that strengthen decision-making skills and competencies, especially in formulating possible courses of action and in facilitating student mastery of such concepts. In keeping with the spirit of the process, the following issues of this case study are systematically listed by calendar date and identified in italics, followed by a discussion of ideas and perceptions that support the basic elements of the identified issues.

The specific design, in this instance, is to promote responsive interaction within the classroom and to possibly or hopefully expand and develop outcomes and solutions that are rationally beyond the scope and reasoning of the stated answers suggested below. This integrative process expands complex concepts into formulated solutions. Have fun.



There are several approaches in writing legal issues from a set of given facts. The issue writing function is generally more art than science. Sometimes, a short factual wording or restatement of a happening will include all the elements needed to describe the issue. At other times concepts of a law need to be used or a combination of facts and concepts. The "Student Instructions," listed above, gives a good review of legal issue construction.

A continual theme throughout this Case Study is the possible infringement of trademarks via Section 43 of the Trademark Act and its various revisions (15USC1125), including the Federal Trademark Dilution Act of 1996. Of particular importance to the facts of this Case Study is the action of Dilution by Tarnishment where IOU continually infringes OIU's many famous trademarks by manipulating the marks through various stages of Internet state-of-the-art techniques to the benefit of IOU and to the detriment of OIU, and IOU use of numerous trademark names and symbols that are the same or similar to OIU trademarks. In both instances, these actions on the part of IOU create a likelihood of injury to OIU's reputation.

A second continuing theme throughout this Case Study would pertain to numerous actions that would violate provisions of various U.S. Federal Trade Commission (FTC) statutes, regulations and rules. Included in this category would be the many actions of Dr. Phast that allude to "unfair methods of competition" and "unfair and deceptive acts or practices in or affecting commerce" (United States Code: Title 15, Chapter 2, Subchapter 1, Section 45). A second area of FTC concern would relate to "deceptive advertising" practices (United State Code: Title 15, Chapter 2, Subchapter 1, Section 53.

There are also instances where these FTC provisions run parallel and/or supplement infringement of trademarks and other intellectual property rights issues. Additionally, in the context of this Case Study there are always U.S. Constitutional issues and defenses of Freedom of Speech, Due Process of Law, etc. The complexities are numerous. While some of the above identified themes will be addressed where it is prudent or critical to the facts presented, the main issues pertain to principles of contemporary Internet law as it has been developing during the last decade.

Introduction to Case Study

"Old Ivy University" and "International Olympic University"

The first two sections of the Case Study give detailed backgrounds and descriptions of the two universities and their presidents. The purpose of these facts is to introduce the primary parties of this Case Study. There are certainly hints as to character, trust, reputation, standards, practices, etc., of both parties (possibly good class discussion material for introducing the Case Study). Developing perspectives from this information will be useful in addressing and clarifying the myriad of facts presented and alluded to in the following "Additional Facts" section of this Case Study. There are several issues related to trademark law that should be identified:

a. [Trademark Slogans] Is "Let's Win the Big One" a phrase that could be a legitimately protected trademark as the specific "slogan" for Old Ivy University? Yes. A trademark "slogan" is protected because it functions as a "mark." Generally speaking, a trademark slogan can be almost any phrase that is short and it does not need to be clever or novel. The question in this Case Study is "does the slogan develop enough of a secondary meaning to immediately identify with O1' Ivy?" Even if the slogan were considered a "weak mark," continuous use of it for five years would be presumed to have acquired a secondary meaning and will be eligible for placement on the federal principal trademark register. "Reach out and touch someone," "This Bud's for you," and "Don't leave home without it" are good examples of legitimate slogans. The courts declared that "You've Got Mail" is too generic and not protected. What about "It's Hot" by Paris Hilton?

b. [Trademark & Confusion] Does the "International Olympic University's" symbol (a golden goat with the letters "IOU" emanating from its head) infringe on the prior registered trademark symbol of "Old Ivy University" (a golden goat with the letters "OIU" emanating from its crown)? Yes. The phrase "likelihood of confusion" is key to all trademark conflicts. A "likelihood" means that confusion is probable; not necessarily that it has happened, or that it will happen, but that it is more likely than not that a reasonable customer (or fan) will be confused. In this situation, the two golden goats with similar letters (OIU and IOU) emanating from both goats" head area would probably be confusing even though one set of letters came from the crown and the other directly from the head.

c. [Trademark Dilution] Is a trademark dilution action a timely claim for Old Ivy University to file against the independent business of "Old Ivy--Let's Win Used Cars?" No. The fact is that "Old Ivy University" did not previously claim that the name of the used car business would weaken the distinctiveness, value, and reputation of the "Old Ivy" name for over a 15 year period even though the junior user (the used car business) relied on similar marketing channels within the geographic area as Old Ivy University. The dilemma is that Old Ivy University created a "constructive weaver" that essentially acts as a laches device that bars O1' Ivy from equity or legal action because it neglected to act upon its rights for an unreasonable length of time. Such inaction appears as though the alleged infringement has not harmed O1' Ivy very much. This is known as "sleeping on your rights," and a court is less likely to give the senior user (O1' Ivy) any relief if it has not taken action to protect its rights despite another's use of the same or similar trademark for a long period of time. It should also be noted that under federal registration provisions of the Lanham Act (31U.S.C111) the mark can qualify for "incontestable" status if it stays on the principal register for five years.

Additional Facts

September 2005 through October

The events during this time period are mainly transitional, addressing drastic changes in business activity, adding staff and position, and identifying demographics of its potential customer base. Again, developing perspectives from this information will be useful in addressing and clarifying the myriad of facts presented and alluded to in this section, "Additional Facts." There is certainly the fact that IOU is attracting a high volume of E-mails from international locations, and there may be a hint as to why. This is the ideal time to introduce and discuss IOU's intent up to October time frame, and, later, to compare its intent at various phases throughout the remainder of this Case Study.

November 1 & 2, 2005 [Metatags]

a. Is the use of third party senior trademarks in metatags permitted if the use does not mislead or confuse consumers? Yes. Metatags are hidden html codes in Webpages that ostensibly describe content to signal search engines. Its primary use is to assist search engines to index and summarize sites. For example, a car dealer (Ford) would be permitted to use a famous automobile trademark (Ford) in its metatags if the dealer sold this brand of automobiles (Ford) without infringing the famous trademark (Ford). Not so with IOU. It appears that the metatags are being used for no legitimate purpose and are in fact placed on the IOU page to draw OIU customers unsuspectingly to the IOU Web site. The burden-of-proof otherwise would be for IOU to prove. This practice is arguably fraudulent because these intentionally mis-descriptive search terms cause search engines to more prominently display these Web sites when users are looking for other sites, causing users to suffer initial confusion. Such misuse of metatags may cause consumer confusion or dilution that infringes a trademark owner's rights.

November 3, 2005

a. [Cybersquatting] Are the actions of Dr. Rob M. Phast in registering domain names that are the same as, or confusingly similar to, the trademarks of OIU considered cybersquatting (also known as "stealth" squatting) events that the Anticybersquatting Consumer Reform Act (ACRA) addresses as being actions considered to be in bad faith with intent to extort profits? Yes. The Internet Corporation for Assigned Names and Numbers (ICANN) principles parallel many of the concepts of the ACRA and the above issue. The sequence goes (i) the domain name is identical or confusingly similar; (ii) the registrant has no rights or legitimate interests in respect of the domain name; and (iii) the domain has been registered and is being used in bad faith. The major form of cybersquatting usually takes the form of attempting to extort payments from the legitimate owners (OIU). This may not have been the original intent of Dr. Phast, but it certainly was a diversion of his by November 27th and 29th (SEE below). The intent factor in this instance was that Dr. Phast applied for multiple domain-names registration that are known to be identical or confusingly similar to others.

b. [Typosquatting] From the facts given for this date, are there indications that Dr. Phast was intentionally including possible "typosquatting" terms for registration? Yes. Typosquatting involves registering names that are minor typographical variations on trademark and brand names. The expectation is that surfers will encounter the 'typo' site when they mis-key the desired domain name (eg.,,,, or For this date note the following registered names: "," "," "," and "" Note the slight misrepresentations or spellings of each. Typosquatting is actually a subcategory of cybersquatting and is addressed similarly for ICANN and ACRA purposes.

November 4, 2005 [Cyberpiracy]

Do the actions of Dr. Phast and his brother of registering domain names similar or identical to OIU trademarks for the purpose of diverting Web traffic from those sites to the specific IOU site constitute a violation of ACRA and ICANN principles as discussed above (November 3, 2005)? Yes. Cyberpiracy involves the same behavior as cybersquatting, but with the intent of diverting traffic to an infringing site. The key factor is that it is a "bad faith" diversion of Internet traffic for financial gain. Here, Dr. Phast gained a benefit by confusing surfers, who may believe that the address is operated by OIU and not IOU. The "intent" and "bad faith" factors are similar to cybersquatting as described above. As to cyberlaw and domain name disputes, federal and state courts generally have followed the principles set forth by ACRA and ICANN.

SEE "November 12, 2005" below for the issue and discussion from the perspective of "pagejacking." Compare and contrast.

November 5, 2005 [Keywording & Cyberstuffing]

Is Dr. Phast's practice of submitting OIU's trademarks as keywords through numerous search engine groups for IOU's various Web sites enough to cause initial customer confusion? Yes. There can be very subtle legitimate uses in some instances of keywords that relate to a competitor, but this is not the situation with Dr. Phast. His subscribing words to the search engine groups were blatantly that of his competitor's name and trademarks and constitute an infringement, especially taken in context with the many other actions of Dr. Phast and his brother. The bad faith principles of ICANN and ACRA (SEE above) are alive and well in this instance. With the combined use of metatags (SEE "Nov. 1 & 2" above) and keywording, Dr. Phast is entering into the practice of cyberstuffing, an action to fool search engines by including as many infringing keywords as possible on his pages in an attempt to ensure that his Web page will come up in the first five or ten listed by a search engine. This practice, in the context of Dr. Phast's overall actions can only strengthen evidentiary facts as to the bad faith intent of Dr. Phast.

November 6 & 7, 2005 [Linking]

Is the practice of building hypertext links from one site to another site without permission or licensing from the original linked site a violation of the linked site's rights or generally against principles of civil law? No. One of the most fundamental elements of the Internet is linking to other sites. The culture of the Internet expects linking to flourish unhindered by property rights claims by the linked site's owner. A U.S. district court found there was no copyright infringement by use of a link, because linking did not copy the page. The general answer is based on the theory that going online creates an implied license for anyone with a computer to view the Web site. Hence a surface link to a home page does not generally require permission. Conversely, it is argued that site owners wishing to block access to unauthorized or unknown outsiders may simply use password protection, cookie technology, or some other authentication scheme to exclude unwanted downloads. The facts of the Case Study indicate the linking of benign generic information on the regional attributes of university life in the Oxford-Cambridge area. No infringement or violation involving intentional bad faith here.

November 8, 9, & 10, 2005 [Framing]

Is the practice of displaying the content of another Web site inside your own Web site with a frame or window where the user never leaves the framer's site and the frame conceals the identity of the original site safe from actions involving infringement of copyrights and trademarks? No. The practice is a step beyond linking. Framing raises the linking site's value by free-riding on the linked site's value. It deals with the control by the framer in manipulating the other sites content on its own framed page. Linking does not create the same type of confusion as framing, which gives the viewer the impression that the framed information is connected to the framing site. A framer may even appropriate a competitor's content and hide it, so that an unsuspecting user is transported to the appropriator's site even though he or she cannot see the appropriated material. This is a violation of trademark and copyright law.

November 11, 2005

[No issue in the sense that OIU does not have a cause of action against IOU. The six businesses advertisers do have a potential cause of action against IOU. Each advertiser pays IOU one cent a hit which is really a fraud on the businesses because IOU uses techniques of mousetrapping, pagejacking, and others that will count each hit several times. The negative covenant (implied) in the contract between IOU and an advertiser would suggest that each advertiser would receive one cent for each individual that entered the contracted for site. Generally, this is a U.S. Federal Trade Commission situation with help from the U.S. Department of Justice, Antitrust Division. SEE the third paragraph of the Introduction of Case Study Issues above.] There are additional federal fraud charges regulated by the Federal Communications Commission, the Patriot Act, etc. that may also be available.

November 12, 2005 [Pagejacking, Metatags, Cyberpiracy & Redirects]

Is the action by Dr. Phast in copying the entirety of the OIU Web Home Page, including the imbedded text messages and metatags, and inserting a "redirect" command imbedded in the copycat OIU site that would immediately reroute the user to, a legitimate approach in attracting potential customers to the IOU site? No. Here, following surfer search engine results that would list a variety of related sites, including the bogus copycat site developed by Dr. Phast, the surfers assume from the listings that the Dr. Phast site contains the legitimate information they are seeking and click on the listing. The selection by the surfer of the so-called OIU site immediately reroutes or redirects the OIU surfer to the IOU Home Page and away from the Web pages they were intending to visit. This "pagejacking" technique is prohibited under the Federal Trade Commission Act that prohibits unfair or deceptive practices affecting commerce.

SEE "November 4th, 2005" above for the issue and discussion from the perspective of "cyberpiracy." Compare and contrast.

November 13, 2005 [Mousetrapping & Pagejacking]

Is the action by Dr. Phast to incapacitate the "back" and "close" buttons on the IOU site that would continuously return the surfer to the original copycat OIU site or other registered Domain Name sites in a seemingly unavoidable endless loop considered an unfair and deceptive practice by the Federal Trade Commission? Yes. The technique described here ("mousetrapping) is actually a follow-on to the "pagejacking" process described above under November 12, 2005. After the deception of alluring the surfer to the IOU site, the mousetrapping technique, under the control of IOU, prevents the surfer from leaving the IOU or similarly controlled sites of IOU. Again pagejacking and mousetrapping is prohibited under the Federal Trade Commission Act, which prohibits unfair or deceptive practices affecting commerce since these techniques involve the improper diversion of consumers away from Web pages they were intending to visit. Though there has been very limited enforcement of these violations, in September 1999, the Commission filed suit in federal court and obtained a preliminary order stopping these activities and suspending the Internet domain names of the defendants. Since then, the Court has entered default judgments against two defendants and a stipulated permanent injunction against a third, baring them from future law violations. A fourth defendant has evaded law enforcement authorities in Portugal.

November 14 & 15, 2005 [Cybergripers & Domain Protest Sites]

Is the proper registration of an abuse of the ICANN principles when registered by a direct competitor against the commercial interests of the named competitor and as a perceived benefit of the registrant? Yes. This issue of "Cybergripers and Domain Protest Sites" is not decisive for all situations. There are always questions of free speech (maybe a U.S. Constitutional issue) and the right of parody for starters. Some sites may approach being scandously and disgustingly abusive and blatantly responsible for statements that are libelous. There may be claims of infringement of trademarks and copyrights and confusion of the surfer. It has been suggested by a few so-called experts that a new organization, The Dot Sucks Foundation, be created as a special zone outside trademark restrains "to enable citizens to improve civil society." Generally, these cases are addressed on a case-by-case basis. At this point, ICANN actions, arbitration, and courts have tended to favor the corporate plaintiff. In this Case Study, it appears with a certainty that IOU, a competitor, had no legitimate interest in the domain names and that it registered the names in bad faith to directly injure its competition. The intent and bad faith are strengthened by adding the metatags.

SEE "November 26, 2005" relating to additional discussion on First Amendment Freedom of Speech.

SEE "November 1 & 2, 2005" relating to the issue of metatags.

November 16, 2005

SEE "November 14 & 15, 2005" relating to the issue of "Cybergripers and Domain Protest Sites."

SEE "November 5, 2005" relating to the issue of keywording.

November 17, 2005

a. SEE "November 13, 2005 relating to the issue of mouseclicking.

b. [Issue of this date related to facts of November 19th] [E-mail Bombing, Spoofing, Cybertresspassing] Is there a legitimate common law cause of action against IOU as to its participation in a scheme of sending 100,000 daily E-mails to OIU that essentially overwhelmed OIU's computer equipment to be inoperable?. Yes. The operative facts in this instance are that OIU was responsible for E-mail "bombing" (sending large amounts of data, such as numerous E-mails, in an effort to consume additional system and computer network resources of OIU) 100,000 daily "spoofed" (disguising an e-mail to make it appear it was mailed from an address different from the one from which it was actually mailed without the permission of the user of the actual "spoofed" address) that was the major factor in rendering OIU's computer equipment inoperable. Legal precedents are as follows. The legal action here for "bombing" is intentional "trespass to chattel" (personal property). OIU's possessory interest was invaded by IOU that caused harm to OIU's personal property or diminution of its quality, condition, or value as a result of OIU's actions. Damages and injunctive relief have been awarded. For "spoofing," The U.S. Federal Trade Commission has relied on "unfair and deceptive practices" under Section 5 of the FTC Act and with violating Section 521 (15U.S.C.Section 6821). Though the facts are somewhat different in this instance, there is a probability that the principles and concepts of "unfair and deceptive practices" would be addressed. In these instances, there has been injunctive relief. [Note that the issue of "spamming" is not addressed because there are no causes of action by OIU to file against IOU.]

November 18, 19, 20, 21, 22, & 23, 2005 [Dilution by Tarnishment]

Do the facts and outcomes of the evidence presented (in the listed dates) bring forth a probably cause of action for infringement of trademark specifically by dilution by tarnishment that would allow both equitable remedies and damages? Yes. The basic reasoning for "dilution by tarnishment" is found under "Introduction," second paragraph above. There is enough information to indicate that IOU willfully intended to trade on the recognition of the OIU trademarks. Additionally, there is more than likely enough information that IOU intended to harm the reputation of OIU. As to damages, there is enough intent and bad faith (scienter) on the part of IOU through its various planned infringement actions to warrant assessment of actual and likely damage to the distinctiveness or reputation of the various OIU trademarks. These identified paragraphs are mostly evidentiary as to existing and potential dilution of trademark when all the activities of IOU became known to OIU. Making a list of negative outcomes from this Case Study would be a good start. Integrating IOU's actions with these negative outcomes at the end of the Case Study will give insight as to the possible impact and potential damages encountered by OIU.

November 26, 2005 [Freedom of Speech & Due Process of Law]

a. Under facts of this Case Study, do "First Amendment Freedom of Speech" and "Due Process of Law" provisions of the U.S. Constitution protect IOU from OIU requests for equitable relief or damages. No. The U.S. Constitution protects free speech against government censorship unless the censorship is very closely related to a compelling governmental purpose, such as the prevention of fraud, defamation, riots, or subversive activities. Though political speech is given the greatest protection, commercial speech is also protected by the First Amendment. The content of commercial speech receives a somewhat lower level of constitutional protection, balanced against the need for truthfulness (and control of confusion) in the marketplace. Because some types of speech fall outside of the protection of the First Amendment, the government may regulate and even completely ban such content as unfair methods of competition, deceptive advertising, infringement of copyrights and trademarks, and defamatory speech. As previously discussed, the blatant actions of IOU for infringement and unfair method of competition would go beyond the limits of protecting free speech.

As to Article 8, Section 1, clause 7 of the U.S. Constitution, Congress has explicit power of legislation in the areas of patents and trademarks. The application of this provision has been the Lanham Act and its various amendments (generally granting certain intellectual property monopolies, helping the public not to be confused, and protecting the reputation of a holders) and the establishment of the U.S. Patent and Trademark Office. As to cyberlaw and the Internet, and especially domain names, the courts have been at least mildly reluctant to rule on infringements of trademark owners' rights, but have basically followed the principles of the ICANN "intent" and "bad faith" approach discussed previously. There are also the various exemptions under Section 102 of the Lanham Act, some which apply to trademarks.

As to the Due Process of Law provision of the U.S. Constitution, at this point IOU has not been denied and there certainly has been no taking of "life, liberty, or property" from IOU.

November 27, 2005

SEE "November 3, 2005" for issue pertaining to cybersquatting. In this instance Dr. Phast has completed another element beyond the November 27, 2005, of the sequence by attempting to extort payments from the legitimate trademark owner, OIU.

November 29, 2005

SEE "November 27, 2005" relating to cybersquatting issues.

November 30, 2005:

Are the various actions of Dr. Goode on this date of the type that might be chargeable as a federal criminal felony count of extortion against Dr. Goode? Yes. Here, there is a definite twist to our factual scenario. All of the sudden Dr. Goode has created her own personal entry into the criminal justice system, totally unaware of her actions to do so, and the potential of disaster to her own cause. The problem is that Dr. Goode used a legal white paper that was designed for internal OIU use as a management tool for making decisions. The mistake is that Dr. Goode used a minor part of the information from the document to directly "threaten" Dr. Phast and his brother with "fear" of an actual immediate serious criminal prosecution under the "force" of what appears to be an official color of right to do so if the brothers do not comply with her exacting wishes (a definite final "take-it-or-leave-it proposition) under Section 1 of the Sherman Act. Such direct threats of force and fear of immediate serious criminal prosecution are definite factors in considering whether or not the action of Dr. Goode would be considered "extortion" and punishable with a fine and/or up to 20 years in prison via the Hobbs Act.

Though there is a number of state and federal statutes that could illustrate this issue, The Hobbs Act (U.S. Code: Title 18, Part 1, Chapter 95, Section 1951 entitled "Interference with commerce by threats or violence) addresses the situation well. The U.S. Supreme Court has declared that Congressional intent of the Hobbs Act is expansive enough to include such intangible views that are induced by wrongful use of actual or threatened forces or fears that would include wrongful unfettered access under color of official right to deprive respondents exclusive control of their rights whether they are direct or indirect, actual or potential, beneficial or adverse. The words in the previous paragraph that are either italicized or in "quotation marks" fit the model requirements of the Hobbs Act as to requirements for "extortion." Dr. Goode was, in effect, attempting to by-pass the criminal justice system on her own (sort of a vigilante approach) in interfering and depriving the brothers of their "due process" rights of defending an apparent crime. The essence of this is that the government handles crimes in their entirety for society. The Hobbs Act has been strengthened recently to meet the challenges of a technology age through inclusion of applications addressed by The Patriot Act, various wire and data fraud statutes, etc.

The question at this point is how Dr. Goode should have conducted herself on the eventful day of November 30, 2005, to protect herself from such apparent criminal acts as discussed above? The legitimate approach was to couch her threats to Dr. Phast and his brother in terms of "civil" liabilities only. It is permissible to threaten a civil law suit if demands are not completed. This is part of the negotiation process. The Sherman Act, as amended by the Clayton Act and the FTC Act of 1914, also includes civil liability approaches with treble damages. If she were still looking at the criminal approach, she still makes the demands as before and documents said demand in detail, but withhold the threats of criminal prosecution. If the demands are not completed to her satisfaction, she could go to the FBI with the documentation and request a review for possible prosecution. Decisions would made as to criminal viability by the FBI, Department of Justice (FBI actually an agency within the DOJ), or other government officials, as appropriate. There are other approaches possible that will not be discussed, such as various intentional torts, including the intentional inflection of emotional distress, quasi-contracts, constructive bailments/trusts, etc.

In closing, the many indiscretions of Dr. Phast, as listed throughout the dates prior to November 30, 2005, were discussed and resolved from a civil law perspective using various statutes, case law interpretations, and even international conventions to resolve the issues. The introduction of criminal law approaches for this last date is timely from the perspective that the business community and society are relying on it as never before because of such features of today's fast changing events and the likes of Enron, World Com, etc., and the beat goes on.


The world of Cyberlaw is quickly maturing. In Cyberspace we are dealing with Cybercrimes and defining Cyberjurisdiction within the Cybercommunity, and some are resolving civil disputes through There is concern with Cyberterriorism, Cyberstalkers, Cybertrespass, and Cybervandalism. In daily transactions there are Cybernotarys, Cyberbills, Cyberchecks, CyberCash, CyberGold, and a growing business population becoming Cybergroupies. With all this tumultuous change taking place on an almost daily basis, the transition has been outstandingly orderly as to developing methods of resolving disputes. Existing Common Law principles, U.S. Constitutional concepts, statutes, and administrative laws have integrated well, for the most part, within the new evolving CyberWorld, as elaborated and experienced throughout this Case Study. Examples, such as the Sherman Antitrust Act of 1890 (through amendments and case law), are very applicable today and integrate very naturally into the CyberIssues of the day. The key is to stay informed, continue learning, and advancing our knowledge as we travel through the many CyberAdventures of this intriguing CyberJourney.


E. & J. Gallo Winery v. Spider Webs Ltd., (S.D.Tex., Jan. 29, 2001) [Cybersquatting]

Nissan Motor Co., Ltd. v. Nissan Computer Corp., 289F.Supp.2d1154 (C.D. Cal., 2000) [Metatagging]

Bernina of America, Inc. v. Fashion Fabrics Int'l, Inc., (N.D. Ill. Feb. 8, 2001) [Metatagging]

Ford Motor Co. v. Lapertosa, (E.D. Mich., Jan. 3, 2001) [Cyberpiracy]

Playboy Enterprises, Inc. v. Global Site Designs, Inc., (S.D. Fla. May 15, 1999) [Cyberpiracy]

Playboy Enterprises, Inc. v. Welles, 7F.Supp.2d 1098 [Metatags]

Playboy Enterprises, Inc. v. Universal Tel-A-Talk, Inc., No. 96-6961, 1998 U.S. Dist. LEXIS 17282 [Trademark Infringement]

PaineWebber Inc. v. Fortuny, Civil Action # 99-0456-A (E.D. Va. Apr. 9, 1999) [Cyberpiracy]

Playboy Enterprises, Inc. v. Netscape Communications, Inc., 55F.Supp.2d1070 (C.D. Cal., 1999) [Keywording]

Nettis Environment Ltd. V. IWI, Inc., 46F.Supp.2d722 (N.D. Ohio 1999) [Keywording]

Ticketmaster v., 2000 (C.D. Cal., August 2000) [Linking and Deep Linking]

The Washington Post, et al. v. TotalNews, Inc., Civil Action # 97-1190 (S.D. N.Y.) [Framing]

FTC v. Carlos Pereira d/b/a [Pagejacking and Mouse Trapping]

Hasbro, Inc. v. The Internet Entertainment Group (Dilution by Tarnishment)

Ticketmaster Corp v. Inc., 54U.S.P.Q.1344 (C.D.Cal.2000) (Framing)

Hard Rock Cafe Intern. (USA) Inc. v. Morton, 1999WL717995 (Framing)

Compuserve, Inc. v. Cyber Promotions, Inc., 962F.Supp.1015 (Cyber Trespass and Bombing)

FTC v. GM Funding, Incl, Global Mortgage Inc., et al., SACV 01-1026 DOC-U.S. District Court, CA (Spoofing)

Shields v. Zuccarini, 254F.3d 476 (in rem & Cybersquatting)

Ringling Bros.--Barnum & Bailey, Combined Shows, Inc. v. Utah Division of Travel Development, 935F.Supp.736 (Trademark Slogans)

America Online, Inc. v. AT&T Corp., 64F.Supp.2d549 (Trademark Slogans)

eBay v. Bidder's Edge, 100F.Supp.2d 1058 (Cyber Trespass)

Brian McNamara, California State University, Bakersfield

Donavan Ropp, California State University, Bakersfield

Henry Lowenstein, California State University, Bakersfield


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