Trademark law, Cybersquatters and Online Registrars

By now, most people are aware of the Anti-Cybersquatting laws, but what about the company that registers a domain name that is confusing or similar to a registered trademark.  It is unclear whether or not, the registrar can be sued under the Anti-Cybersquatting Act or traditional Trademark infringement claims. 

Verizon has sued a company called “On Line Nic” for allegedly registering over 663 domain names in bad faith.  Verizon alleged that these were registered to steer traffic away from its websites.  This case may help clarify the scope of the Anti Cybersquatting Laws and the ability of trademark owners to protect themseleves by suing domain name registrars as well as the domain name owner. 

At this stage, Verizon was able to obtain a default judgment against “On Line Nic”  obtaining $50,000 per domain name for a total judgment award of $33.2 Million.  However, we will see if “On Line Nic” files an appearance and contests the claims or if Verizon is able to collect on the judgment.  In any event, this issue is something that will be litigated and decided in the coming months and years.

Assembly of Patented Inventions Abroad?

 35 USC 271 (f) seemingly could be used by a patent owner to acquire damages for the supply of components to a patented invention that was going to be assembled abroad.  However, after the Supreme Court’s restriction of 271 (f) based on the jurisdictional limiations of US Law it was thought to be of limited value.   

The Supreme Court found that presumption against extraterritorial appliction of US law prevented a US patent owner from asserting a 271 (f) claim against individuals duplicating software overseas.  Microsoft v. AT&T.  Despite this ruling, the Federal Circuit recently upheld the application of 271 (f) to components used in the performance of a patented method for stimulating the heart.  Cardiac Pacemakers v. St. Jude Medical (Fed. Cir. 2008). 

The Federal Circuit permitted Cardiac to recover damages for St. Jude’s ICD’s that were sold overseas and were said to infringe claim 4 of the ‘288 patent.   Consequently, it seems that 271 (f) still has some bite that can be used to prevent individuals from shipping components overseas and assembling or carrying out processes overseas to avoid a US patent owner’s infringement claim. 

It should be noted that the Federal Circuit’s opinion in Cardiac Pacemakers v. St. Jude Medical is non-precedential. 

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Independent Contractor or Employee-Potential Pitfalls.

A poor independent contractor agreement can raise serious issues regarding the payment of additional worker’s compensation premiums, unemployment insurance contributions, as well as expose a business owner to the Illinois Wage Payment and Collection Act, Title VII of the Civil Rights Act of 1964, the Americans with Disabilities Act, the Age Discrimination in Employment Act and/or the Family and Medical Leave Act. 

All of these statutes determine the rights of an individual based on his or her status as an employee or independent contractor.  If a court finds that an individual is an employee, then it can lead to penalties, fines and payment of additional premiums for providing Worker’s Compensation Insurance for an individual that was believed to be a independent contractor.  Wausau General Insurance Company  v. Kim’s Trucking Inc., 289 Ill. App.3d 201 (1st Dist. 1997).  Often times, business owners think that putting together a contract and providing a 1099 is sufficient, however, these factors are not dispositive. 

Courts looks at the nature of the relationship, the right to control the individual, the level of supervision provided to the individual, the tools provided to the individual, the level of specialized knowledge that is required to perform the tasks, the method or manner of payment and often these factors may lead to the finding of an employment relationship, even if, you have a independent contractor agreement.  See.  Martens v. MCL Construction Corporation, 347 Ill. App.3d 303 (1st Dist. 2004) and Roberson v. The Industrial Commissions, 225 Ill.2d 159 (2007). 

Having a good independent contractor agreement, proper payment means and good business practices in utilizing the inviduals can help reduce this risk.  If you have questions regarding an individual’s independent contractor or employee status, then please feel free to contact our office.