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Beyond The Legalese

Starbucks and Exit 6 Pub Take Shots at One Another

1/15/2014

 
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Coffee is coffee, and beer is beer, and never the twain shall meet.

It’s not likely that coffee giant Starbucks will be grabbing a cold one—or, sitting down for coffee, for that matter—with anyone from Exit 6 Pub and Brewery any time soon.  Jeff Britton, the owner of Exit 6 (a small craft beer nano-brewery in Cottleville, Missouri) received a cease-and-desist letter in mid-December from the law firm in charge of protecting Starbucks’ trademarks.  Apparently, a number of Exit 6 patrons casually dubbed one of Britton’s stout concoctions a “Frappicino” back in January of 2013, and three of them posted about it on Untappd, the social media network for beer enthusiasts.  The poorly-spelled moniker caught the attention of the Starbucks legal team, and they respectfully asked that the brewery discontinue use of the name that so closely resembled that of their trademarked Frappuccino frozen coffee drink.  Britton immediately complied, renaming his brew the “F-Word,” as per his sarcastic, yet remarkably good-natured response to the legal order.

None of this would have made the news, however, had Exit 6 not posted about the incident on its Facebook page on December 26th.  Along with a brief summary of the matter, Britton published copies of the cease-and-desist letter, his tongue-in-cheek reply…and a scan of the $6 check that he sent along with his response, indicating that it represented “the full amount of profit gained from the sale of those three beers.”  (He said they should put it towards the legal fees of the attorney who wrote him the letter.)  The story quickly went viral, and by the time 2014 rolled around only a few days later, Britton was being interviewed not only by local news stations, but by the likes of Fox and ESPN.  Online coverage exploded as well, with stories appearing everywhere, from NPR and The Huffington Post to legal blog Above the Law.  Most outlets also published the now-infamous correspondence in its entirety.

In this case, while Starbucks clearly had cause to be concerned about dilution of their trademark, their letter seems to have turned into a PR backfire.  With news and social media channels lighting up with people virtually high-fiving Exit 6 for putting Starbucks in its place, the strip mall brewery is reportedly enjoying an influx of new customers, thanks to all the free publicity, and online commenters are claiming to swear off Starbucks altogether.

Trademark infringement is a very real concern, and companies have the right and the responsibility to protect their registered marks, else they risk diluting—or even losing— them.  A few years ago, such a case would probably not have gotten much traction (if any) in the news.  The trademark holder would send its letter, the suspected infringer would either comply or go to trial, the two parties would “stand presently at the great judgment seat,” and the case would be fought, settled or won behind the closed doors of the courtroom.  Over time, however, the court of public opinion has become a lot more vocal; and thanks to social media, it’s very common that customers (or even the general public) are driving the perception of brands even more than the brands themselves are.  Furthermore, many people can’t resist taking the side of a small-business David when he’s facing off against a big ol’ corporate Goliath meanie.  For this reason, companies nowadays have to think long and hard about whether sending a cease-and-desist order to say, a small business in the boondocks, will be worth their while or too big a risk.

LinkedIn Sues Faceless Data-Scraping Bots

1/15/2014

 
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LinkedIn Corporation may not have a face (or name) for the individuals responsible for circumventing many of their security measures to mine a significant amount of user data since last May, but they certainly have a case against them.  The professional social network noticed suspicious patterns of activity and discovered that thousands of fake profiles had been created by automated software programs, somehow avoiding the various safeguards (e.g. CAPTCHA, daily activity limits, etc.) meant to weed out such “bots.”  These artificial accounts were being used to copy, or “scrape” information from hundreds of thousands of bona fide member profiles, presumably for less-than-noble purposes such as identity theft, phishing, or other spammy practices.  The bogus profiles were traced back to a mass of accounts on Amazon’s cloud-computing platform, and as part of its suit filed against these Doe Defendants last week, LinkedIn “intends to file motions to expedite…discovery requests” that it will be serving on Amazon Web Services, in hopes that they will fork over the names of the offending accountholders.  (Amazon.com, itself, is not being charged.)Interestingly, the fact that no specific defendants are named here does not put a damper on such a lawsuit.  It’s been done (and won) before, and continuing with the investigation and legal proceedings—even with as-yet-unidentified defendants—serves numerous purposes.  It disrupts a botnet’s activities, since its operators are probably running scared, knowing that the authorities are on to them.  At the same time, the lawsuit intimidates future cybercriminals from targeting the plaintiff’s sites, since they see that these digital crimes are being taken seriously.  Legal action also incentivizes third parties to cooperate with the investigation, since it involves actual subpoenas, and not just (oft-ignored) letters and voicemails to a company’s in-house counsel.  Finally, if and when the perpetrators are identified, a strong case has already been built up against them, ready to wallop the defendants as soon as they hit the courtroom.

The individuals ultimately responsible for the illegal data extraction used so many different tactics to evade LinkedIn’s security measures, that the company believes they must have been aware of the various restriction levels built into the site’s technology.  Not only do these practices violate LinkedIn’s User Agreement, they also break state and federal laws relating to cyber-fraud (and possibly copyright laws, as well), making this infraction a pretty big deal.  However, the botnet behind this case may very well be a “zombie army” made up of unsuspecting individuals’ computers, which have been infected by a virus or otherwise compromised.  So, even if the physical infrastructure is taken out, unless the actual hackers are caught, they could, theoretically, pull off such a scheme again.  LinkedIn has already disabled the fake profiles and implemented additional security measures on its site.  Given the extensive usage of its networking tools amongst today’s professionals and recruiters, though, LinkedIn’s engineers (and those of other companies like it) certainly have their work cut out for them in terms of making their systems more secure; after all, malicious technology advances right along with the more honorable kind.

Pintrips: Sorry, Pinterest…“Pin” is Generic

1/15/2014

 
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In yet another David vs. Goliath legal battle, online travel-planning startup Pintrips filed a motion earlier this month to dismiss a case brought against it last October by social bookmarking site Pinterest.  Pinterest claims it has monopoly rights on certain contextual uses of the word “pin” online, and says that the defendant has been encroaching on that monopoly by utilizing the term on some of the pages of its site.  Pintrips, in turn, is now fighting back, asserting that the word “pin” is too generic to be claimed solely by one entity, and is fair game for anyone to use.  As one means of support for its argument, Pintrips lists numerous other major companies that use the “pin” term in various places within their products, without incurring the wrath of Pinterest.  Besides, claims Pintrips, they are a price-comparison tool, and “not a social media platform” in the business of sharing visual images, which differentiates them even more from Pinterest.  Furthermore, a court in Europe recently found that Pinterest doesn’t even hold the trademark for its own name—London startup Premium Interest claimed it first.  Thus, Pinterest seems to be on rather shaky ground lately, when it comes to the strength of its brand.The main theme of Pintrips’ appeal appears to be an accusation that “specious claims” are being relied upon to strong-arm a “hard-working startup” as a result of Pinterest’s presumed frustration at not having done their due diligence at the outset to register the marks of some of their key terms.  Pinterest, however, claims that it has successfully applied for registration of the “pin” mark (though, they have yet to register it), and that the burden of proof now lies in the hands of the defendant to provide evidence that the term is already used so ubiquitously elsewhere, so as to be considered “generic.”  Pinterest has won six previous trademark infringement cases related to attempted registrations using the “pin” prefix, so perhaps they are cautiously optimistic about prevailing in this case, as well.

Considering the potentially daunting legal fees looming for small startup Pintrips, and the threat of losing ground on the branding front for heavily venture-funded Pinterest (not to mention taking a big hit when it comes to their market valuation and any IPO hopes they’ve been harboring), both sides have something to lose here.  As a rule, judges’ decisions on cases such as these tend to involve highly subjective interpretation, particularly when it’s difficult to determine or prove whether there exists any actual consumer confusion between two similar marks, or whether the defendant intended to ride the coattails of the plaintiff’s brand or not.  Given this subjectivity, the fate of this case may even ride on whether or not the judge (or eventual jury) is familiar with either or both of the sites in question.  With the “pin” term currently being used freely in other, more high-profile contexts both online and offline, it will be interesting to see whether this turns out to be a fight well-picked for the social bulletin board–sharing site…or whether the motion to dismiss is granted, nipping this case in the bud.



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