list lawyers -read this

[Mike Arman <armanmik@n-jcenter.com>]

>
>Date: Fri, 19 Nov 1999 13:02:46 -0500
>From: Dan Simoes <dans@iclick.com>
>Subject: list lawyers - read this
>
>How does the following affect audifans.com, in your opinion?
>
>Thanks.
>


Real-life story about domain name conflict problem - I was in the middle of
it, so this is NOT second hand urban legend stuff.

I have a friend in England who has had a business there for about 15 years,
which I will call ABC-Financial. He has a website, and you can find him on
the net if you know his correct URL - he's on the up and up, and he isn't
stealing anyone's name - this is his REAL business, and his REAL name.

Turns out there is a HUGE company based in New York, which is also called
ABC-Financial. The New York company only does business in the United
States, and specifically does NOT do the type of business my buddy in the
UK does.

ABC in New York does not have a website incidentally. Evidently one of
their lawyers was checking out the porn sites, and stumbled on
ABC-Financial in England and went nuts. They promptly sent him a
threatening letter demanding that he change the name of his business, get
off the internet, and leave the planet as soon as possible or they would
come to England and kill him, slowly, so it would hurt a lot.

He called me - "helphelphelp the sky is falling!" - and I sat down with my
wife the lawyer and we did some research on it.

Some of what we found:

(do a yahoo search on "domain name conflicts")

There was a company in Italy named "Play-men" which was a knockoff of
"Playboy". Playboy sent Play-men some strong letters, and Play-men made a
fatal mistake - they agreed to jurisdiction in a New York court, and since
US law was the venue, Play-men quickly got skinned alive and is now out of
business.

There is a jazz cafe in Kansas City named "The Blue Note Cafe", and they
were slammed by the company of the same name in, again, NYC. The Kansas
City place had to change their name even though they were properly
registered in Kansas and had a disclaimer on the website about not being
affiliated with the NY Blue Note, and in fact, even provided a link to it.

In both these cases, the deciding issue was that there was US jurisdiction,
which could be enforced, and was.

NOW - There is an ongoing trademark dispute between a company that makes
hamburgers here in the US, and boasts "Billions and Billions served" and
most of Scotland, where the name "McDonald" was around for several hundred
years long before Ronald McDonald was even a gleam in Ray Krok's eye, and
is very popular.

The McDonald's lawyers discovered a curious thing - they were not licensed
to practice law in Scotland, and Scotland is not part of the United States
of America, so US law doesn't apply there! (There is an international
trademark agreement, but a verrry good case can be made for Scottish first
use of the name, so McD's lawyers wisely decided to skirt that issue.) US
law doesn't apply outside of the US! Duhhh.

Further, the McDonald's lawyers found themselves being told to get on the
next airplane and go home or the judges (many of whom were named McDonald,
or had friends and relatives who were) would throw them in jail for
contempt of court. Seems they didn't like big American coprorations coming
to their country and pushing people around.

With ABC-Financial, the tactic was this - "You guys are welcome to sue us -
but you gotta do it in England, where you will have to hire a slew of
expensive English lawyers, and it will have to be heard in front of very
unsympathetic English Judges. It will cost you a bunch, and you'll very
likely lose, and this guy isn't hurting you anyway - he has two employees
and you have 1,700 and do $650,000,000 a year in business. We don't admit
to US jurisdiction -so come and get us, but in England!"

They bitched, pissed and moaned, and finally agreed in writing to leave my
guy alone - he was more trouble to pursue than he was worth, and he really
wasn't hurting them any.


The main problem is to establish jurisdiction - if you can do that, then it
is simply a trademark dispute, and then it is fairly cut and dried. If you
can't establish jurisdiction, it becomes a game of bluff ("We're gonna sue
you!" vs. "Go ahead, make my day!") may the best bluffer win.

If the "defendant" gets stubborn and doesn't get intimidated, he wins, even
if the law is not strictly on his side - the costs to pursue are simply too
high. Yes, ABC in NY could have spent $100K plus to go to England and sue
my guy, but they realized that if they did it and lost (which is what
probably would have happened), they'd get fired, and if they did it and won
(unlikely), they might still get fired ("You spent HOW MUCH to squash this
guy???" - You're fired!").


NOW - how does that affect Audifans.com?

Since Audi does have a USA presence (VWOA), and the list is based in the
US, I think they COULD step on us if they so desired. I seem to recall Dan
checking with Audi to see if they had a problem with the name, and I seem
to recall an answer from them along the lines of "no problem" -or I hope
that's what they said. Note that they could have stepped on us before the
cyber-piracy law was passed, and the law just gives them an additional
hammer, should they decide to use it.

However, a few Howevers, however.

First, we need to read the text of the law for the various exceptions and
exclusions contained therein. Despite the crowings of the victors below,
often these laws contain VERY significant loopholes. The "winners" will
always say "we won it all!" so they can make their corporate clients and
bosses feel better about paying the legal fees, but in fact, I am reminded
of the joke about the US mired in Vietnam and the USSR mired in Afghanistan
where two mud-spattered infantrymen are saying "Lets just declare victory
and get the hell out of here!" Ouch. (This isn't my joke - blame Bill
Maudlin as in "Up Front", a terrific book of WW2 cartoons from the pages of
"Stars and Stripes".)

Second, our list is not a profit-making entity, but rather a discussion
group. There are First Amendment problems involved in stepping on us. We
are discussing a make of car; how can we discuss it if we can't name it?
Freedom of speech is a powerful defense, and it saved my bacon when I was
publishing a line of motorcycle-oriented technical books, and the
manufacturer of said motorcycles sent me a nasty lawyer letter telling me I
couldn't use their name in my books. After much negotiation during which I
refused to let go of the freedom of speech position, they decided I was
either right, or would be more trouble than I was worth to step on, and
eventually left me alone.

Finally, it would be no big deal to move the list server offshore, out of
USA jurisdiction, and operate it under the name "John Doe", paying for
server time by money order. Whoever wanted to could then yell and scream
all they wanted to, but since US law has no effect outside of the US, there
wouldn't be anything they could do about it except eat the resultant bad
press. There are dozens of gambling and lottery sites operating quite
happily in the Caribbean, with many, many US players (that's their market),
and short of stationing a policeman at every internet terminal in the USA,
there's NOTHING the feds can do about it.

A few, very few, technically "legal" websites *have* been shut down - a
Nazi hate group operating out of Finland (I think) was closed down, even
though the operation was in fact "legal" (though morally repugnant in the
extreme), but I seriously doubt that any law enforcement jurisdiction in
the world is so bored that they will shut down an automotive discussion
group just because the manufacturer of the cars in question doesn't happen
to like the content or the name.

This is an interesting area of law, and I am encouraging my wife to explore
it more deeply - I think there's quite a bit of money to be made here.


Best Regards,

Mike Arman










>| Dan |
>
>SOURCE: Porsche Cars North America Inc.
>
>Porsche Applauds Congress' Passing of Cyberpiracy Bill
>
>ATLANTA, Nov. 19 /PRNewswire/ -- Porsche Cars North America Inc. (PCNA),
>is presently battling hundreds of cyberpirates who have registered
>Internet domain
>names that attempt to capitalize on the worldwide fame of the trademark
>Porsche®. Cyberpirates engage in the predatory and parasitical practice
>of including Porsche® in a
>domain name in order to attract Internet traffic to hard-core porn
>sites, in order to give themselves instant recognition on the Internet,
>in order to extort money from Porsche
>Cars, or in order to otherwise take advantage of the goodwill that
>Porsche has developed in one of the most recognized brands throughout
>the world. With the rapid explosion of the Internet, competition for
>the attention of the nearly 200 million web users is fierce, and trading
>on the goodwill of famous trademarks is one way for web site operators
>to get noticed.
>
>``Famous trademarks such as Porsche® are some of the most important
>assets of well-known corporations,'' noted Patricia R. Britton, General
>Counsel of Porsche Cars North America. ``Porsche has spent
>millions in promoting its trademarks. Porsche simply cannot afford to
>have its world renowned name tarnished and diluted by the unauthorized
>misappropriation of its trademarks in domain names on the
>Internet.''
>
>The Cyberpiracy Bill provides for statutory damages of $100,000 per
>domain name against cyberpirates who register domain names that include
>famous trademarks. ``Such damages will deter the thieves and
>cyberpirates who steal the good name and reputation that Porsche has
>worked so hard to develop,'' continued Patricia R. Britton. ``Porsche
>Cars led the battle on Capitol Hill in pressing for passage of the
>Bill. Porsche Cars applauds Congress for recognizing so quickly the
>irreparable damage that cyberpirates are inflicting on consumers and the
>public when they take advantage of famous trademarks. This Bill
>will provide Porsche with a much needed tool in waging its ongoing
>battle against cyberpirates.''
>
>``The Internet is no longer the domain of the Department of Defense or
>academia,'' noted Gregory D. Phillips, outside trademark litigation
>counsel for Porsche Cars who testified before Congress on behalf of
>Porsche. ``Rather, the Internet is becoming a significant commercial
>player. As the Internet increasingly becomes a major player in the
>commercial world, the Internet must become subject to the rules of the
>commercial world. Domain names are the functional equivalents of
>corporate or business names, store-front signs, or telephone listings.
>The real commercial world does not allow unauthorized persons to use
>famous trademarks in corporate or business names, on store-front signs,
>or in telephone listings. The same rules that apply in the real
>commercial world must also apply in cyberspace.'' 
>
>- -- 
>Dan Simoes
>iClick, Inc.				email:dans@iclick.com
>120 Bloomingdale Road			voice:914-872-8015
>White Plains, NY 10605			fax:914-872-8100