Alerts

Aug 19, 2009

Facebook Creates Potential for Brand Theft

Social networks such as Facebook, Myspace and Twitter have moved beyond the realm of simple individual networking sites to become critical avenues for commercial activity. As a result, the potential for various violations of intellectual property law have emerged. With the potential for violations of legal rights increasing as the networking sites evolve, it is essential that companies are knowledgeable about the issues involved and employ monitoring strategies to prevent violations.

TRADEMARK RIGHTS

Recent developments in Facebook's Web site have created the potential for trademark violations. A trademark is a word, phrase, logo or other graphic that a company uses to distinguish its product or products from those of others. The main purpose of a trademark is to designate the source of goods or services. Essentially, a trademark is the commercial equivalent of a signature. Trademarks are protected under the common law by use, even when they are not registered with the federal government. In order to gain federal protection, a trademark must be: (1) distinctive rather than merely descriptive or generic; (2) affixed to a product that is actually sold in the marketplace; and (3) registered with the U.S. Patent and Trademark Office.

In the context of the Internet and "e-commerce," federal courts have held that the use of others' trademarks in Web site domain names can constitute trademark infringement. In the Lanham Act, the federal government codified various laws designed to protect trademarks in the context of e-commerce. The act also provides trademark holders with protection from "cybersquatting." Cybersquatting occurs when an individual registers a domain name that includes or is confusingly similar to a trademark he does not hold. The trademark-related portions of the Lanham Act outlawed the act of registering, with the bad faith intent to profit from a domain name that is confusingly similar to a registered or unregistered mark or dilutive of a famous mark. Congress passed the act to prevent individuals from registering a trademark as a domain name with the intent to sell it to the trademark owner.

FACEBOOK'S POTENTIAL FOR VIOLATIONS OF TRADEMARK RIGHTS

Recently, Facebook has updated its site to allow its members to set up a username and direct link to their Facebook page. For example, a user can choose any available username they want, which thereby creates a direct link to their Facebook page in the form of facebook.com/username.

Potential trademark violations occur where a user chooses a username that is also a trademark. To illustrate, suppose a user selects a username that is a registered trademark which he does not have the right to use. His username is now "trademark" and it has created a Web site with the address of facebook.com/trademark. Doing this allows Facebook users to: (1) violate trademarks by using them in a domain name; and (2) cybersquat on domain names with the intent to sell them to registered trademark holders.

HOW TO PREVENT BRAND THEFT AND TRADEMARK VIOLATIONS

Companies should actively monitor social networking sites in order to prevent trademark violations and to prevent others from "squatting" on their intellectual property rights. Facebook offers an online form that companies can fill out to report and eliminate trademark infringements. The form can be accessed by clicking here.

Moving beyond Facebook, companies should also consider creating specific groups or divisions responsible for monitoring the various social networking sites such as Twitter and Myspace. For example, Twitter also uses usernames. Any Twitter user could create a username that illegally uses another's brand name. Every social networking site creates the potential for brand theft. Therefore, it is imperative to monitor the sites and keep up to date with new developments in how the sites are used.

One of the most effective ways to monitor these sites is to use them as part of a marketing strategy. By creating a Facebook or Twitter site, the company not only helps to ensure that its brand is not being used by another, but also gains access to valuable consumer information. These sites will allow the company to directly communicate with a massive group of potential consumers in ways that are not otherwise possible. It will also create an official brand site, which consumers may already be looking for. There are currently over 200 million users on Facebook alone, and over 1 billion messages transmitted on the site daily. Establishing a free brand site on the network will prevent others from stealing a company's brand name, while simultaneously providing the company with access to an untapped consumer market.

Contributing writers/editors: Lindsey Paige Markus and Elizabeth Osborne, Attorneys; and Nick Marsh, Law Clerk.