Welcome to the Plaskacz and Associates ‘LEGAL SOLUTIONS TO SOFTWARE ISSUES’ newsletter. This is a free information service provided by the law firm of Plaskacz and Associates. IT IS DESIGNED TO PROVIDE INFORMATION OF A GENERAL NATURE ONLY AND IS NOT INTENDED TO REPLACE SPECIFIC LEGAL ADVICE. Q2 2003

What are Domain Names?

Domain names are unique numeric Internet Protocol addresses (such as 206.191.60.210) that have been made easy to understand by using letters to match the numeric code (e.g. “plaskacz.com”). It is these letters that are referred to as “domain names.” Since no two internet sites can have the same name, it is the registration of these domain names that is the subject of much controversy.

Why are Domain Names important?

When a client, or potential client, is searching for a company’s web site, their first attempt will likely be to guess at the domain name (e.g. “www.corel.com”). If the client gets an error message or, worse still, someone else’s site using what they thought was the name of a specific business, they may get frustrated and have to resort to slow, tiresome search engines. Since no one wants unhappy clients, a business is well served by having an easily accessible web site. Furthermore, marketing a product is facilitated by simple internet identifiers and, like any other trademark or trade name, can be a source of recognition in the marketplace (e.g. http://www.ibm.com).

Who regulates the use of Domain Names?

InterNIC (a USA company) is in charge of registering subdomain names in most top level domains (including .com, .org, .gov, .edu and .net. as well as the more recent .firm, .shop, .web, .arts, .rec and .info). Usually, this registration is done on a first-come, first-served basis, however, this has led to problems such as registrants holding domain names for “ransom” (e.g. registering a common name like “MTV” and then selling it to Music Television). Relief may be available for a small number of “famous” trademarks (e.g. McDonalds) but also for the less famous by proving a prior right through a registered trademark. Therefore, the best course of action is to register one’s trademark as a domain name even if the organization has not yet decided to establish an internet presence. If an organization uses a domain name within the .ca domain (Canada), registration is done through CIRA.

Can a Domain Name Become a Trademark?
How does it meet the use requirement?

Generally speaking, mere advertisement of services (but not goods) using a registered trademark is enough to constitute “use” of the trademark for the purposes of s.4 of the Trade-marks Act (Canada). This said, it is easy to establish use of a domain name as a trademark if it is associated with services because the name need only be used for advertisement. Unfortunately, domain names corresponding with tangible goods not delivered through the internet (e.g. Hardware as opposed to software) are more difficult to “use” under s.4. However, if a trademark appears on a contract conducted on the Internet, and if the contract operates so as to effect transfer of the title to the goods, it may be considered used.

Which part of the Domain Name could be considered a trademark?

In Canada it has been informally stated that the part of a domain name that constitutes a trademark is the mark as a whole (however, the “http” portion etc. has no trademark significance). This means that, theoretically, extensions including top-level domain names can be part of a registered Trademark. The U.S. Patent and Trademark Office has a formal policy statement dealing with the proper classification of Internet related services. They indicate that the “top-level” domain name portion has no trademark significance for registration purposes. However, use (in the trademark sense) of the “name” part of a domain name may result in a common law advantage when attempting to register the name as a trademark.

Generally, a name used merely as an Internet address is insufficient to constitute use under the Trade-marks Act. However, a domain name used to advertise services may have sufficient use to be considered a trademark. If a domain name is being used as a trademark, the person owning the trademark has right of action against any person using it without consent. That is to say, generally, if a person is using a domain name as a trademark (meaning they have sufficient use as per above) another party cannot register a confusingly similar trademark for any purpose.

Essentially, businesses should register domain names which incorporate their strongest trademarks. This means that monitoring trademarks should also mean monitoring domain name registrations. Note that to register a domain name as a trademark one must meet the registrability requirements of a regular trademark.

How Do I Avoid Problems?

Domain names and their relationship with trademarks is still a very new area of law. Since it is continually changing and developing, the best way to avoid problems associated with using domain names as trademarks, or vice versa, is to register your already existing trademark as a domain name immediately. If your trademark (or a confusingly similar one) is already being used by another entity as a domain name, you may have a right of action against them. Further, if you own a domain name and someone else applies for registration of a confusingly similar trademark, you can likely oppose the application as long as your domain name meets the requirements of a trademark. Also keep in mind that you can put the offending domain name on hold through InterNIC if you have priority and if the domain name was registered with InterNIC.

Plaskacz & Associates would be happy to help you assess your specific situation related to internet law.

Welcome to Plaskacz and Associates ‘LEGAL SOLUTIONS TO SOFTWARE ISSUES’ newsletter. This is a free information service provided by the law firm of Plaskacz and Associates. IT IS DESIGNED TO PROVIDE INFORMATION OF A GENERAL NATURE ONLY AND IS NOT INTENDED TO REPLACE SPECIFIC LEGAL ADVICE. Q4 2002

When adopting a trademark for a software product or service, the first step is to determine whether there has been prior use of that mark on similar goods or services in the marketplace. This can be particularly difficult for companies that market their products or services internationally since there is no single global scheme for trademark protection. Each jurisdiction has its own laws and regulations, although to some degree international treaties have standardized certain modes of protection. Your trademark lawyer will have access to international databases of registered trademarks that will be the starting point to your search.

Once a search has been conducted, your trademark counsel will evaluate the search results in order to provide you with an opinion as to whether or not the mark is available for use and registration.

Assuming a decision has been made to proceed with the mark, the next stage is filing a trademark application in each country in which registration is being sought. NAFTA has not adopted a central registry, however, the EEC has implemented a European wide registry that confers protection in all EEC countries. One downside risk, however, is that a prior registration in a single country could defeat the application. Assuming your mark otherwise qualifies and no opposition is encountered or, alternatively, is successfully overcome, your application will in due course proceed to registration.

Product names should always be protected as trademarks by identifying them as such. Unregistered names should be accompanied by a ™ or MC (marque de commerce) in the upper right hand corner and once registration has been obtained, the names can be labeled with an ®. Since use of a trademark registration symbol in the United States prior to securing a US registration is illegal, North American advertisements of Canadian companies promoting products whose names are registered in Canada should be referenced as being PRINTED IN CANADA.

In addition, it is imperative that trademarks be used at all times, especially in advertising, as adjectives, never as nouns or verbs. The trademark is used to identify the goods or service, never to replace the name of the goods or service. Improper use of a trademark, or allowing others to use the trademark improperly, can result in the trademark becoming generic and open to use by others in the public domain, thus negating any rights that you may have. A trademark becomes generic when it is commonly accepted to use the trademark name of the product instead of the actual name. ‘Escalator’ was formerly a trademark for a certain brand of ‘moving staircase’. Since the name ‘Escalator’ became generic, the Escalator company could no longer stop other manufacturers from using the word to describe their ‘moving staircases’ and the Escalator company lost its brand name recognition. Recently Rollerblades® fought to stave off the same fate.

Special consideration also arises when a trademark is used by a licensee. The owner of a trademark is responsible for ensuring that all the goods and services bearing that trademark are of the same consistent quality. This protects the public by allowing them to assume consistency through repetitive purchases. Trademark owners are also obligated to ensure the public is not confused by the origin of the goods and services. This requires proper notice to be employed when a trademark is used by a licensee so that there is no confusion as to the source of the goods and services.

The Canadian Trade-marks Office will prevent anyone else from registering a mark that is the same as or confusingly similar to your mark. The Trade-marks Office does not, however, keep an eye out for cases of infringement. It is the trademark owner’s responsibility to monitor the marketplace and, if it is found that someone is using a mark or a trade name that is confusing with your mark, to take legal action.

SOLUTION: Review all trademark usage and marking. Set guidelines for employees and licensees to follow.

Welcome to Plaskacz and Associates ‘LEGAL SOLUTIONS TO SOFTWARE ISSUES’ newsletter. This is a free information service provided by the law firm of Plaskacz and Associates. IT IS DESIGNED TO PROVIDE INFORMATION OF A GENERAL NATURE ONLY AND IS NOT INTENDED TO REPLACE SPECIFIC LEGAL ADVICE. Q4 2002

When adopting a trademark for a software product or service, the first step is to determine whether there has been prior use of that mark on similar goods or services in the marketplace. This can be particularly difficult for companies that market their products or services internationally since there is no single global scheme for trademark protection. Each jurisdiction has its own laws and regulations, although to some degree international treaties have standardized certain modes of protection. Your trademark lawyer will have access to international databases of registered trademarks that will be the starting point to your search.

Once a search has been conducted, your trademark counsel will evaluate the search results in order to provide you with an opinion as to whether or not the mark is available for use and registration.

Assuming a decision has been made to proceed with the mark, the next stage is filing a trademark application in each country in which registration is being sought. NAFTA has not adopted a central registry, however, the EEC has implemented a European wide registry that confers protection in all EEC countries. One downside risk, however, is that a prior registration in a single country could defeat the application. Assuming your mark otherwise qualifies and no opposition is encountered or, alternatively, is successfully overcome, your application will in due course proceed to registration.

Product names should always be protected as trademarks by identifying them as such. Unregistered names should be accompanied by a ™ or MC (marque de commerce) in the upper right hand corner and once registration has been obtained, the names can be labeled with an ®. Since use of a trademark registration symbol in the United States prior to securing a US registration is illegal, North American advertisements of Canadian companies promoting products whose names are registered in Canada should be referenced as being PRINTED IN CANADA. In addition, it is imperative that trademarks be used at all times, especially in advertising, as adjectives, never as nouns or verbs. The trademark is used to identify the goods or service, never to replace the name of the goods or service. Improper use of a trademark, or allowing others to use the trademark improperly, can result in the trademark becoming generic and open to use by others in the public domain, thus negating any rights that you may have. A trademark becomes generic when it is commonly accepted to use the trademark name of the product instead of the actual name. ‘Escalator’ was formerly a trademark for a certain brand of ‘moving staircase’. Since the name ‘Escalator’ became generic, the Escalator company could no longer stop other manufacturers from using the word to describe their ‘moving staircases’ and the Escalator company lost its brand name recognition. Recently Rollerblades® fought to stave off the same fate.

Special consideration also arises when a trademark is used by a licensee. The owner of a trademark is responsible for ensuring that all the goods and services bearing that trademark are of the same consistent quality. This protects the public by allowing them to assume consistency through repetitive purchases. Trademark owners are also obligated to ensure the public is not confused by the origin of the goods and services. This requires proper notice to be employed when a trademark is used by a licensee so that there is no confusion as to the source of the goods and services.

The Canadian Trade-marks Office will prevent anyone else from registering a mark that is the same as or confusingly similar to your mark. The Trade-marks Office does not, however, keep an eye out for cases of infringement. It is the trademark owner’s responsibility to monitor the marketplace and, if it is found that someone is using a mark or a trade name that is confusing with your mark, to take legal action.

SOLUTION: Review all trademark usage and marking. Set guidelines for employees and licensees to follow.

North American companies seeking to sell their products or services in Europe usually select a test market, generally the UK or France before expanding throughout the European Union. Along with this incremental step comes the question of where to protect one’s trademarks….only in the test market or throughout the European Union? Here is some information to help make that decision.
<h2>The Community Trademark</h2>
<h2>The System</h2>
The Community Trademark (CTM) was established by the European Council Directive # 4094 on December 20, 1993, effectively creating a single registration to cover all of the member states. The CTM did not supplant the national trademark laws of the member states but did create a parallel system.
<h2>The Advantages</h2>
The principal advantage for a trademark owner in obtaining a CTM registration is that registration, and renewal and maintenance of that registration, in the individual member states is not required. Whereas the cost of a CTM likely exceeds the cost of obtaining a registration in a single member state, it is significantly less expensive than obtaining registrations in three or more member states. A further benefit of a CTM is that usage in one or more member states satisfies the requirement to maintain the registration in the entire European Union. This has the effect of reserving your trademark for future use in the rest of the European Union where you may not yet to be doing business. It also has the effect of preventing trademark pirates from usurping one’s trademark prior to registration in another member state.
<h2>The Disadvantages</h2>
The main disadvantage in seeking to obtain a CTM is the conflict that one might encounter with a trademark for which rights have previously been obtained in any single country of the European Union. The Office for Harmonization in the Internal Market (OHIM) first examines the mark to determine whether it meets the formal legal requirements (i.e. distinctive character) and then searches whether the mark is potentially confusing with either a previously filed CTM application or a national trademark. While no official objection will be based on this review the search report will be forwarded to the applicant for consideration. When the application is published for opposition, OHIM will notify the owners of prior community trademark registrations listed in the search report but will not notify owners of earlier national rights. The owners of earlier rights may within three months of the date of publication file with OHIM a notice of opposition on any of the following grounds: a) a prior CTM application or registration; b) a prior national application or registration; c) a prior international registration extended to a member state of the European Union; d) a mark which has become in any member state well-known, as defined in the Paris Convention; and e) unregistered marks in any member state which under the law of that country can prohibit the use of a subsequent mark. Oppositions can become very costly and if successful have the effect of rejecting the application for all EU countries even though the application impacts prior rights in only one country. It is, however, possible to convert a CTM application into a national application without losing one’s date of priority.
<h2>The Decision</h2>
If your growth plans are limited to only a few European countries and you have no plans for further expansion, protection at the national level may be adequate. This is particularly true if your trademark is not sufficiently distinctive to avoid potential confusion with the marks of others. If, on the other hand, you are seeking to protect a mark that is strong enough to pass the onerous test of distinctiveness on a European scale it would be a better decision to protect your mark throughout the European Union by obtaining a CTM. The most sensible approach to making this determination would be to have a qualified trademark agent secure a preliminary search on your behalf.

For more information please contact us.

Welcome to Plaskacz and Associates’ ‘LEGAL SOLUTIONS TO SOFTWARE ISSUES’ newsletter. This is a free information service provided by the law firm of Plaskacz and Associates. IT IS DESIGNED TO PROVIDE INFORMATION OF A GENERAL NATURE ONLY AND IS NOT INTENDED TO REPLACE SPECIFIC LEGAL ADVICE. Q2 2002

Employees leaving information technology firms often take with them vital trade secrets of the their former employer. The results of such action may be extremely damaging to the former employer, irrespective of whether or not such damage was intended by the employee. One way to minimize any potential fallout from a former employee exploiting company trade secrets is to conduct an extensive ‘exit interview.’ At this interview the employee is reminded of all the confidentiality obligations owed to the former employer and how such obligations extend beyond the employment contract period as a result of the duty of good faith imposed on all departing employees.

Employees leaving information technology firms often take with them vital trade secrets of the their former employer. The results of such action may be extremely damaging to the former employer, irrespective of whether or not such damage was intended by the employee. One way to minimize any potential fallout from a former employee exploiting company trade secrets is to conduct an extensive ‘exit interview.’ At this interview the employee is reminded of all the confidentiality obligations owed to the former employer and how such obligations extend beyond the employment contract period as a result of the duty of good faith imposed on all departing employees.

In order to conduct an effective exit interview, the company must have throughout the employment term created an atmosphere of respect for its intellectual property. To the extent that an employee already has an awareness of the value that a company places on its intellectual property assets, the reinforcement of the need to protect that value after departure is made that much easier. Of course, a contractual term within the employee’s employment agreement prohibiting post termination disclosure is the most effective deterrent. The interview can then make reference to that contractual obligation.

Many companies additionally seek to restrict competition from departing employees who may directly or indirectly transfer trade secrets to an incumbent competitor or who may set up shop based on the knowledge they have learned. While non-compete provisions in employment contracts are lawful if properly drafted, one must be careful to ensure that the restrictions are not so broad as to effectively preclude the former employee from making a living at his chosen profession.

Remember… trade secrets are irretrievably lost once disclosed. An effectively drafted employment contract coupled with an exit interview can help maintain those secrets.

Welcome to Plaskacz and Associates’ ‘LEGAL SOLUTIONS TO SOFTWARE ISSUES’ newsletter. This is a free information service provided by the law firm of Plaskacz and Associates. IT IS DESIGNED TO PROVIDE INFORMATION OF A GENERAL NATURE ONLY AND IS NOT INTENDED TO REPLACE SPECIFIC LEGAL ADVICE. Q3 2002

Your corporate website can provide an opportunity for your company to disseminate investor relations information. There are, however, a number of issues that a company must consider when it chooses to publish this material on-line. Investor relations information posted on the web should be viewed as an extension of your formal corporate disclosure. As such, this type of communication is subject to securities laws and regulatory rules. Disseminating investor relations information on the web should not be viewed merely as a promotional tool.

Dissemination of information via the Internet is subject to the same laws as traditional forms of dissemination such as news releases. This means a company must ensure that information posted on its website is not misleading; information is misleading if it is out of date, incomplete, incorrect or omits a fact so as to make another statement misleading. This imposes a duty to review, correct and update all investor relations information on your website.

However, disclosure by the Internet alone will not meet a company’s disclosure requirements and a company must continue to use traditional means of dissemination. Not all investors have access to the Internet and even investors with access will be unaware that new information is available unless the company notifies them of an update. Recently though, the Toronto Stock Exchange strongly recommended that all listed companies maintain a corporate website to disclose investor relations information electronically as an appropriate and potent tool of investor relations.

It is imperative that a company clearly identify and separate its investment information from other information on its website. In particular, promotional, sales and marketing information should not be included on the same web pages as investor relations information. A company’s homepage should clearly distinguish sections containing investor relations information from sections containing other information.

Promotional materials related to a distribution of securities may contravene a variety of rules and regulations and should only be posted on a Web site if such materials are cleared by your lawyer first. Special regard should be made to foreign securities regulators who may take the view that posting offering documents on a Web site that can be accessed by someone in their jurisdiction constitutes an offering in that jurisdiction unless appropriate disclaimers are included on the document or other measures are taken to restrict access.

A company should not post any investor relations information on its website that is authored by an outside source, unless the information was prepared on behalf of the company, or is general in nature and not specific to your company. Your company may be seen to be endorsing the views and conclusions of any such information. This could also give rise to an obligation to correct the information if you become aware that the content is or has become misleading. Instead of posting outsider investor information, it may be desirable to provide a list of all analysts who follow the company together with contact information so that investors may contact them directly. The list should be complete and include all analysts that the company knows to follow it, regardless of their recommendations.

Corporate disclosure on your website will give rise to many legal issues. It is in the best interests of your company to consult with your legal advisors to discuss the accuracy, timeliness and completeness of all information posted on-line.